If a high-ranking insider picks up company stock, it is usually a bullish event. This is because top-level insiders tend to have the most up-to-date information on the companies they work for.
Here, we are going to highlight insider buying at WEC Energy Group Inc (WEC:US). WEC is a US energy business. The company, which is based in the Midwest, generates and distributes electricity and natural gas to over 4.5 million customers. It’s traded on the New York Stock Exchange and currently has a market capitalization of $28 billion.
WEC Energy Group Inc: Insider Buying
Our data shows that on November 4, a Director at WEC Energy Group, Thomas Lane, bought 6,000 WEC shares at a price of $89.47 per share. This cost the insider just under $530,000 and increased his holding by over 300%.
Lane has over thirty years of financial experience within the energy sector. Previously, he spent seventeen years at Goldman Sachs in the investment banking division, focusing on the energy sector in the United States. He was also a partner at Energy Capital Partners for 12 years before becoming Vice Chairman in 2017. Lane has testified to the House Energy Subcommittee on energy related matters which shows the high regard he is held in. This background means he is likely to have a good understanding of WEC’s prospects and true value.
What stands out about this trade from Mr. Lane is its size. By spending over $500k on stock, the Director has signaled his confidence in the company. The purchase has increased his holding by more than three-fold which suggests he is certain that the stock is currently undervalued.
WEC Energy Group's recent results saw revenue and net income grow versus Q3 2020 and against the first nine months of 2020.
For the quarter ended September 30, the company reported net income of $290 million, up from $266.8 million a year prior. Meanwhile, electricity consumption by commercial and industrial customers was up by over 3.5% versus Q3 2020. Residential electrical use was up by 0.3%. Compared to one year ago, the company was serving 8,000 more electric customers and providing 15,000 extra customers with natural gas.
On the back of this solid performance, guidance was raised with full-year earnings now expected to be between $4.05 and $4.07 per share, up from a range of $4.02 to $4.05 per share.
“Our positive third-quarter results were driven by warmer than normal weather, solid economic recovery in our region, and continued efficiency gains across the enterprise. Our focus on the fundamentals – reliability, customer satisfaction, environmental progress and financial discipline – continues to create value for our customers and our stockholders," said Chairman Gale Klappa.
In light of these solid results – which have led to earnings upgrades – we are of the opinion that the recent insider purchase of stock at WEC Energy is bullish. It would suggest that the Director believes that investors have been undervaluing the stock and that he feels the shares should be re-rated.