Insider Buying

Insider Buying Report: Yellow Corp (YELL:US)

Yellow Corp
(YELL:US)
12 months:
+141%
Activity:
Bullish
Pattern:
Purchase from directors
News:
Q3 results
Yellow Corp
(YELL:US)
12 months:
+141%
Activity:
Bullish
Pattern:
Purchase from directors
News:
Q3 results
On a road laid through barren plains and mountains, a silver-colored container truck, product of Yellow Corp, is traveling down the road.

One of the most bullish insider transaction patterns is ‘cluster buying.’ This is where three or more insiders have purchased company stock within a short period of time.

In this report, we are going to highlight cluster buying at Yellow Corp (YELL:US). Yellow is a logistics company based in the United States. The company has local, regional, national, and international capabilities. It operates under brands such as Holland, New Penn, Reddaway and YRC Freight. It’s traded on the Nasdaq Stock Exchange and currently has a market capitalization of $662 million.

Yellow Corp: Insider Buying

Our insider transaction data shows that between November 8 and December 2, three directors at Yellow Corp bought stock. Those who picked up shares were:

  • Matthew Doheny (56,000 shares @ $12.23 per share)
  • David McClimon (20,000 shares @ $13.12 per share)
  • Douglas Carty (10,000 shares @ $13.51 per share)

In total, these insiders spent around $1.1 million on Yellow stock.

High Insider Score

This insider activity is worth highlighting for several reasons.

Firstly, insider purchases here are quite rare. So, the fact that multiple insiders have purchased stock simultaneously, suggests that sentiment towards the stock within the company has changed. It’s worth pointing out that 2iQ’s Insider Model gives the company a score of 5 which suggests the insider sentiment is very high at Yellow.

Secondly, these insider purchases totaled over $1 million which suggests that the directors are extremely confident that the shares will move in an upward direction. Mr. Doheny has upped his holding in the company by 33% which indicates he strongly believes the stock is undervalued.

Improved Profitability

Yellow Corp's latest results showed that profitability is improving after Covid-19.

For the quarter, operating revenue was $1.30 billion and operating income was $48.4 million. By contrast, in Q3 2020, operating revenue was $1.18 billion and operating income was $19.4 million. The company reported an operating ratio of 96.3% which was the best figure since the fourth quarter of 2018.

“Our multi-year transformation to One Yellow, and the operational efficiencies that we expect to achieve, should put the company in position to continue improving financial results in 2022,” said Darren Hawkins, Chief Executive Officer.

Investors have started to believe that the future is bright at Yellow and the shares have rocketed over the last 12 months as a consequence. They are still only back to the levels they were at in 2018, however, as the company has spent a long period in the doldrums struggling with profitability.

Having looked at these encouraging third quarter results, we see the recent cluster buying at Yellow as bullish. It suggests there is a strong belief within the company that the turnaround will continue, and that Yellow can keep beating market expectations. The directors appear to be confident that the market continues to undervalue the shares even after their strong move upwards over the last twelve months.

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