Corporate insiders have far more information on their companies than outsiders. If these individuals are buying company stock, it’s worth taking a closer look.
In this report, we are going to highlight a large insider purchase at NetApp Inc (NTAP:US). NetApp is a cloud-led, data-centric software company that helps businesses get the most out of their data. It is listed on the NASDAQ Global Select Market and currently has a market capitalization of $15.0 billion.
NetApp Inc: Insider Buying
Our data shows that on 5 March, the General Manager of NetApp’s Hybrid Cloud Services and Foundational Data Services business units, Brad Anderson, purchased 8,100 shares at a price of $61.79 per share. This purchase – which cost the insider $500,470 – increased the size of his holding by 21%.
The Second Large Purchase In Three Months
This insider trade looks interesting for a couple of reasons. Firstly, Anderson – who is responsible for driving the strategy and execution for delivering NetApp’s portfolio of offerings – is a top-level insider. It’s likely he has a very good understanding of the company’s recent progress and its future prospects. It’s worth noting that Anderson has significant industry experience. Previously, he was General Manager of Dell's $12 billion Enterprise Solution Group leading servers, storage, networking and software businesses.
Secondly, this is the second large purchase ($500K+) within the last three months. In December, CFO Mike Berry purchased 15,000 shares at around the same price, spending a total of $958,329 on stock and increasing the size of his holding by 66%. So, Anderson is not the only insider that believes the stock is worth buying.
Q3 Earnings Beat
NetApp recently posted a solid set of third-quarter results for the three-month period ended 29 January 2021. For the quarter, billings came in at $1.60 billion, up 6% year on year while revenues came in at $1.47 billion, up from $1.40 billion in the same period last year and at the top end of the company’s guidance. Non-GAAP earnings per share came in at $1.10 – well above the consensus forecast of $1.01. NetApp’s public cloud services annualized revenue run rate was $237 million, up 186% year on year.
“We delivered another strong quarter with revenues at the top of our guidance range and operating margin and EPS above the high end of our expectations. We have sharpened our execution and Q3 fiscal year 2021 marks our third consecutive quarter of revenue and billings growth,” commented CEO George Kurian.
“Looking ahead, we are uniquely positioned to address customers’ requirements for digital transformations as they deploy workloads in the cloud, as well as maintain and modernize on premises. We are confident in the strength of our position as customers continue to turn to NetApp to help them solve the challenge of managing data in the hybrid cloud as the recovery unfolds,” he added.
In light of this confident tone, we see the insider buying here as bullish.