Insider Buying

Insider Buying Report: Timkensteel Corp (TMST:US)

Timkensteel Corp
(TMST:US)
12 months:
+55%
Activity:
Bullish
Pattern:
Purchase from a director
News:
Q1 results
Timkensteel Corp
(TMST:US)
12 months:
+55%
Activity:
Bullish
Pattern:
Purchase from a director
News:
Q1 results

Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a bullish signal.

Here, we are going to flag some insider buying at Timkensteel Corp (TMST:US). Timkensteel is a US-based steel maker that specializes in manufacturing large steel bars and seamless mechanical tubing. The company produces over 2 million tons of steel annually and the majority of its steel is made from recycled materials. It’s listed on the New York Stock Exchange and currently has a market capitalization of $1.14 billion.

Timkensteel Corp: Insider Buying

Our insider transaction data shows that between May 11 and May 12, a director at Timkensteel, Ken Garcia, purchased 26,330 TMST shares at an average price of $17.81 per share. This purchase cost the insider a little under $500,000 and increased his holding by about 50%.

The chart shows the price history of Timkensteel Corp, with important purchase and sell events highlighted.

Entrepreneurial Background

We are interested in the recent insider buying at Timkensteel for a couple of reasons.

Firstly, Mr. Garcia is the co-founder of Halo Technologies and Precisionlender and previously served as CFO at Ecovation Inc. Given his entrepreneurial and financial background, he is likely to have a good understanding of the company’s investment potential.

Secondly, the director has spent a significant sum of money on company stock and has upped his holding by a large percentage. This indicates that he strongly believes the shares are underpriced by the market at present.

Strong Demand

Timkensteel recently produced impressive Q1 results, benefiting from strong underlying demand for its products and higher pricing.

For the quarter, the company posted a net sales figure of $352 million, up from $273.6 million a year prior. Net income of $37.1 million for the first quarter was significantly higher than the $9.8 million achieved a year before.

The company noted that it has a full order book up until the end of Q3 2022, and that it expects a sequential increase in adjusted EBITDA and positive cash flow in the second quarter.

"I am pleased we began the year with strong profitability despite melt shop interruptions early in the first quarter. Our team performed well in a high demand environment, and we continued to meet the needs of customers while keeping safety at the forefront. Market demand and pricing remain favorable, and we are relentlessly working to improve our commercial and manufacturing effectiveness to ensure sustainable success throughout the year and beyond," said Mike Williams, President and CEO.

On the back of these results, and the bright outlook for the business, we have taken the view that the recent insider buying at Timkensteel is a bullish event.

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