Corporate insiders have deep insight into their companies’ operations. This means that their buying and selling activity can provide investors with valuable trading signals.
In this report, we are going to highlight some interesting insider buying at Parker-Hannifin Corp (PH:US). Parker-Hannifin is a global leader in motion and control technologies. Operating in 50 countries worldwide, it provides precision solutions to the mobile, industrial, and aerospace markets. It is listed on the New York Stock Exchange and currently has a market capitalization of $34.06 billion.
Parker-Hannifin Corp: Insider Buying
Our data shows that between May 6 and May 12, board member James Wainscott purchased 5,000 PH shares at an average price of $266.63 per share. This trading activity cost the insider $1,334,314 and increased his holding to 20,280 shares.
Mr. Wainscott – who joined the board in 2009 – has considerable experience in the industrial industry. Previously, he served as President and CEO of AK Steel, which is now a subsidiary of Cleveland Cliffs. Before this, he served as CFO of AK Steel. He has also served as Chairman of the American Iron and Steel Institute. Given his background, and the fact that steel is a key component of Parker’s products and systems, he is likely to have a good understanding of the company’s prospects.
What stands out about this trade from Mr. Wainscott is its size. The fact that the insider has spent $1,334,314 on stock, and boosted his holding by 32%, suggests that he is confident the stock is set to move higher. The trade also represents the largest open-market purchase from an insider at Parker-Hannifin since August 2019.
Large Dividend Increase
Parker-Hannifin recently posted a solid set of Q3 FY2022 results.
For the period, sales were up 9% year on year to a record $4.09 billion. Meanwhile, earnings per share came in at $4.83 versus $4.12 a year earlier. This was above the consensus forecast of $4.65.
“We delivered another quarter of outstanding performance, demonstrating our teams’ continued execution at impressive levels despite the persistence of supply chain and global economic challenges,” commented Chairman and CEO Tom Williams.
On the back of these results, the company raised its fiscal 2022 adjusted EPS guidance. It now expects adjusted EPS of $18.00 to $18.30, up from previous guidance of $17.80 to $18.30.
It also announced a 29% increase to the quarterly cash dividend.
“We expect to finish the year with a record level of financial performance, giving us a solid foundation to achieve new five-year targets for fiscal year 2027,” said Mr. Williams.
Given the solid results here, and the large dividend increase, we see the insider buying as a bullish indicator.