Corporate insiders tend to have a good understanding of how their companies are performing. If these individuals are buying stock, it’s often a sign that business performance is strong and that the outlook for the stock is attractive.
In this report, we are going to highlight some interesting insider buying at Super Micro Computer Inc (SMCI:US). Super Micro Computer is a leading provider of high-performance server and storage solutions. Its products are designed to offer customers high levels of performance and power efficiency, reducing the total cost of ownership. The company is listed on the Nasdaq and currently has a market cap of $4.59 billion.
Insider buying at Super Micro Computer
Our data shows that on November 4, board member Fred Chan bought 4,500 SMCI shares at a price of $76.00 per share. This trade cost the insider $341,994 and increased his holding to 15,475 shares.
Mr. Chan has more than three decades of experience in the high technology sector and as an entrepreneur. Most recently, he served as Chairman of ESS Technology, Inc., a semiconductor company that he founded. Given his background, he is likely to have an excellent understanding of SMCI’s prospects.
What stands out here is that the insider has increased the size of his holding by 41% with this trade. The fact that he has boosted his holding by such a large percentage suggests that he believes the stock has considerable upside from here.
Full-year guidance raised
Super Micro Computer’s Q1 fiscal 2023 results were good.
For the period, net sales amounted to $1.85 billion versus $1.64 billion in the fourth quarter of fiscal year 2022 and $1.03 billion in Q1 fiscal 2022. Meanwhile, non-GAAP diluted net income per common share came in at $3.42 versus $2.62 in Q4 fiscal 2022 and $0.58 in Q1 fiscal 2022.
On the back of these results, the company raised its full-year net sales guidance to $6.5 billion to $7.5 billion from $6.2 billion to $7.0 billion. It also raised its guidance for non-GAAP net income per diluted share from at least $7.50 to a range of $9.00 to $11.30.
“In Q1 fiscal 2023, our revenue reached a record $1.85 billion dollars, which makes it our 7th consecutive quarter of accelerating YoY growth. The 79% YoY quarterly growth is about ten times faster than the current industry average. It proves that our Green Computing and Total IT Solutions continue to gain customers’ acceptance and trust. We recognize the opportunities being driven by more demanding compute, storage, telco and AI workloads. Our new generation of products based on optimized system building blocks is the foundation behind our strong, continued growth going forward,” commented CEO and Chairman Charles Liang.
In light of these strong results, we see the insider buying here as a bullish indicator.