Corporate insiders tend to have a deep understanding of their companies’ operations. If these individuals are buying company stock, it’s often a sign that business performance is strong and that the outlook for the stock is favorable.
In this report, we are going to highlight interesting insider buying at WEX Inc (WEX:US). WEX is a financial technology company that is focused on fleet solutions, travel and corporate solutions, and health and employee benefit solutions. Headquartered in the US, it provides services to corporate and government organizations globally. It’s listed on the New York Stock Exchange and currently has a market capitalization of $6.8 billion.
Insider buying at WEX
Our data shows that on November 3, board member James Groch purchased 1,400 WEX shares at a price of $151.25 per share. This trade cost the insider $211,750 and increased his holding to 8,465 shares.
Mr. Groch has a background in investment management. Previously, he was Global Group President and Chief Investment Officer of real estate services and investment management firm CBRE Group. Here, he was active in the technology space, leading the development of two significant software platforms that are still core to CBRE today. Given his background, he is likely to have a good understanding of WEX’s investment potential.
What stands out here is that Mr. Groch has increased the size of his holding by around 20% with this purchase. This suggests that he is quite confident the stock is set to move higher.
Full-year guidance raised
WEX recently posted a good set of Q3 results.
For the period, revenue was up 28% year on year to a record $616 million. Meanwhile, adjusted net income was up 43% year on year to $3.51 per diluted share.
On the back of these results, the company raised its full-year 2022 guidance. For the year, it now expects revenue in the range of $2.302 billion to $2.312 billion and adjusted net income of $13.24 to $13.34 per diluted share. Previous guidance was revenue of $2.250 billion to $2.280 billion and adjusted net income of $13.05 to $13.30 per diluted share.
Additionally, WEX increased its share buyback program, announcing that up to $650 million worth of stock may now be repurchased.
"As we move forward our ability to generate strong cash flows combined with the flexibility and diversity of our business model, gives us confidence in our capacity to invest in the business and return capital to shareholders,” commented Chair and CEO Melissa Smith. “Given current valuations, we see this as an attractive time to buy our own shares,” she added.
In light of these results, we see the insider buying activity here as a bullish indicator.