Insiders have access to real-time information on their companies and often also have a wealth of experience that can help them evaluate their organizations’ prospects. If they are buying company stock, it’s generally worth taking a closer look.
In this report, we are going to highlight an interesting insider purchase at Mercury Systems Inc (MRCY:US). Mercury Systems is an American technology company that serves the global aerospace and defense industries. Its customers range from defense prime contractors and government agencies to commercial aerospace companies. The company is listed on the Nasdaq and currently has a market cap of $2.96 billion.
Insider buying at Mercury Systems
Our data shows that on August 8, board member Howard Lance picked up 5,000 MRCY shares at a price of $50.59 per share. This trade cost the insider $252,963 and increased his holding to 8,767 shares.
Mr. Lance has considerable experience in the defense industry. Previously, he was President and CEO of Maxar Technologies, a leading provider of space technology solutions including satellites, robotics, geospatial imagery and services from 2016 to 2019. Before this, he served as Chairman, President, and CEO of Harris Corporation (now L3Harris), a leading global provider of communications and information technology products, software, systems and services to government, defense and commercial markets, from 2003 to 2012.
He also has experience in the investment world. At present, he is Managing Partner at Lance Advisors LLC, an advisory firm serving private equity and institutional investors. Previously, he was Executive Advisor – Private Equity at the Blackstone Group from 2012 to 2016.
Given his background, he is likely to have a good understanding of Mercury Systems’ prospects and investment potential.
Strong Q4 results
Mercury Systems’ share price fell recently after the company missed Q4 earnings estimates. However, the Q4 results weren’t a disaster.
For the quarter, total company revenues amounted to $289.7 million, compared to $250.8 million in the fourth quarter of fiscal 2021. Meanwhile, adjusted earnings per share came in at $0.81 compared to $0.73 per share in the fourth quarter of fiscal 2021. Total bookings for Q4 were a record $331.5 million (up 27% year on year), yielding a book-to-bill ratio of 1.14 for the quarter.
Looking ahead, management was confident that the company can continue to perform well. “Entering the new fiscal year with record backlog of $1.04 billion, we are well-positioned for strong financial performance in fiscal 2023,” said Mark Aslett, Mercury’s President and CEO.
The large purchase from Mr. Lance here suggests that he expects the stock to recover. We see this insider purchase as a bullish indicator.