Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their firms’ prospects. If they are buying company stock, it’s often worth investigating further.
In this report, we are going to highlight an interesting insider purchase at Maximus Inc (MMS:US). Maximus is a US company that provides business process services to government health and human services agencies. The group, which operates in the US, Canada, Australia, the UK, Europe, and Asia, helps government agencies implement programs rapidly with scalable operations and automated systems. It is listed on the New York Stock Exchange and currently has a market capitalization of approximately $4.41 billion.
Insider Buying at Maximus
2iQ data shows that on December 7, Maximus board member Raymond Ruddy purchased 5,730 shares at a price of $69.91 per share. This trade cost the insider $400,584 and increased his holding to 109,030 shares.
Mr. Ruddy is likely to know the company very well. Between 1985 and 2001, he served as the Chairman of the Board of Directors. And from 1989 to 2000, he served as President of the company’s Consulting Group. He has served as a director since 2004.
It’s worth noting that Mr. Ruddy has made a well-timed stock purchase in the recent past. In mid-June, the insider picked up 17,341 MMS shares at a price of $57.72 per share. Since then, the stock has traded as high as $73.30.
Backlog at an All-time High
Maximus recently posted a solid set of fourth quarter fiscal 2022 results.
For the three months ended 30 September, revenue was $1.18 billion, up from $1.11 billion a year earlier. Net income came in at $69.1 million, up from $52.0 million a year earlier.
Looking ahead, management was optimistic in relation to the company’s prospects.
"Our fiscal year 2022 results provide us confidence that the foundation we laid for the core business is yielding the desired outcome. There were record signed contract awards and the backlog of business is at an all-time high. As we enter fiscal year 2023, we conclude a formative but somewhat volatile period for the business, and now have the opportunity to capitalize on the organic growth we are seeing in the core business, and execution of our recently refreshed strategy," said Bruce Caswell, President and CEO.
The company noted that its sales pipeline at September 30 was $30.7 billion.
In light of these results and the strong sales pipeline, we see the insider transactions here as a bullish development.