Large stock purchases from corporate insiders are often a bullish indicator. No one has more information in relation to a company’s prospects than its executives and directors.
In this report, we are going to highlight a large insider purchase at Teledyne Technologies Inc (TDY:US). Teledyne is a US company that provides enabling technologies to sense, transmit, and analyze information. Its markets include aerospace and defense, factory automation, air and water quality environmental monitoring, electronics design and development, medical imaging, and pharmaceutical research. The company is listed on the New York Stock Exchange and currently has a market capitalization of $19.7 billion.
Teledyne Technologies Inc: Insider Buying
Our insider transaction data shows that on 13 September, Executive Vice President Jason VanWees bought 1,500 TDY shares at a price of $426 per share. This trade cost the insider around $640,000.
This trade is worth highlighting for a couple of reasons. Firstly, it is large in size. The fact that the insider has spent $640,000 in stock suggests that he is very confident the share price is set to move higher. Our Insider Model views the trade as bullish.
Secondly, our data shows that Mr. VanWees has made well-timed purchases in the past. In March, the insider picked up 3,000 shares at a price of $357 per share. Since then, the stock has traded above $460.
It’s worth noting that Mr. VanWees – whose responsibilities include corporate strategy, acquisitions and margin improvement programs – has extensive company experience. The insider joined Teledyne in 1999 and since then, the company has acquired over 60 businesses and grown sales from $750 million to over $3.0 billion.
Before joining Teledyne, Mr. VanWees worked in the Investment Banking departments of Goldman Sachs and Salomon Brothers and was involved in dozens of mergers, acquisitions, and capital markets transactions.
Record Sales in Q2
Teledyne posted a good set of second-quarter results in July.
For the period, the group generated record sales of $1,121.0 million, an increase of 50.8% compared with the previous year. Non-GAAP net income came in at $201.0 million versus $101.1 million in Q2 2020 while adjusted free cash flow was $257 million versus $139 million the year before.
"The second quarter was truly a record for Teledyne with sales, operating margin and earnings, excluding acquisition-related costs, significantly greater than any prior period," said Executive Chairman Robert Mehrabian. "We achieved double-digit organic growth with such sales from digital imaging, environmental and electronic test and measurement instrumentation increasing from 17% to nearly 25% year-over-year,” he added.
The company noted that it has already made very good progress with its integration of FLIR, which it purchased earlier in the year for $8.0 billion. It now expects to achieve its annualized cost savings target of $80.0 million before the end of 2022, as opposed to 2024.
In light of these results, we see the insider buying here as bullish.