Research on legal insider trading has shown that insiders at small firms tend to earn the largest profits from their purchases of company stock. There are two main reasons for this. Firstly, small firms are often growing rapidly, and secondly, small firms are often under-researched.
In this report, we are going to highlight some interesting insider buying at a small US company, Vishay Precision Group Inc (VPG:US). Vishay Precision Group is a manufacturer of sensors and sensor-based measurement systems that serves customers in a range of industries including the defense, aerospace, healthcare, agriculture, and construction industries. The company is listed on the New York Stock Exchange and currently has a market capitalization of $519 million.
Vishay Precision Group Inc: Insider Buying
Our insider transaction data shows that on 12 August, board member Wesley Cummins bought 10,000 VPG shares at a price of $38.81 per share, spending $388,112 on stock. This purchase increased his holding to 160,000 shares.
Good Track Record
This trade is significant because Mr. Cummins has a very good track record when it comes to buying VPG stock. In November, he picked up 10,000 shares at $26.83 per share. Then, in June, he added another 40,000 shares near the $35 mark. Recently, the stock has traded as high as $39.50. Our Insider Model views his latest purchase as very bullish.
It’s worth noting that Mr. Cummins – who is an investment professional – knows Vishay Precision Group well. Previously, he was an analyst at Nokomis Capital, which has a large position in VPG.
Vishay Precision Group’s recent second-quarter results were strong.
For the period, revenues amounted to $75.3 million, an increase 27.4% year on year. Operating income came in at $4.9 million versus $4.0 million in Q2 2020, while adjusted diluted net earnings per share were $0.49, as compared to $0.27 reported a year ago. Analysts had been expecting revenue of $74.8 million and earnings per share of $0.35.
"Second fiscal-quarter sales of $75.3 million marked another solid quarter for VPG. Demand trends across our business were strong, as orders grew 23.3% sequentially to $105.4 million,” commented CEO Ziv Shoshani.
Looking ahead, VPG said that it expects net revenues to grow sequentially and be in the range of $81 million to $87 million for the third fiscal quarter of 2021. It added that its book-to-bill ratio of 1.40 is encouraging for the second half of the year.
In light of these results, we see the insider buying here as a bullish indicator.