Key points
- First Citizens BancShares insiders are buying this stock at a record high.
- Compass Diversified insider buying helps drive the market to eighteen-month highs.
- Gates Industrial insiders helped set a two-year high and analysts see significant upside ahead.
Insider buying is often a significant signal of future price action and never more so when stocks are rising. It’s not uncommon for an insider to buy a stock when it’s going down simply to show confidence in the business, regardless of the risk, but why add money when a stock is going up if you already have skin in the game? Because it can go higher, which is what we’re looking at today: three moving stocks that can go higher in 2024 that insiders are buying.
First Citizens BancShares has a strong family behind it
First Citizens BancShares (NASDAQ: FCNCA) is the holding company for First Citizens Bank, a North Carolina institution that benefited from the banking collapse of 2023. It won the bid for SVB’s assets, doubling its effective base and amplifying its earnings power. Prior to the acquisition, the company was growing at a double-digit pace and has continued to grow at a triple-digit pace ever since.
Over the past year insider activity has been mixed with extensive selling, but a change occurred in the first quarter of 2024. The selling dried up and was replaced by buying with above-average weighting. Three insiders made a single purchase, but these three are related. They include CEO Frank B. Holding Jr. and two of his sisters, who collectively own nearly 20% of the company.
Institutions own about 62% of the bank and are buying into the balance sheet in the first quarter of 2024. Major shareholders include Vanguard and BlackRock, along with several private fund managers. The analyst community is also bullish on this stock, rating it a Moderate Buy and leading the market with price target revisions. The latest targets have the stock trading near $1800, which is about 12% higher than current levels.
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Compass’s diversified executives buy at most one year
Diversified Compass (NYSE: CODI) stock prices rebounded in late 2023 and hit a new one-year high in early 2024, just before insiders started buying. Insiders include the CEO, the operations manager and the head of a branch, each of whom makes at least one purchase. Insider holdings are relatively small, at 2.5% of the stock, but the purchases are noteworthy given the share price action.
Institutions own about 50% of the shares, and their activity is also noteworthy. Institutions have been buying this venture capital firm for two years in total, and activity surged in the first quarter of 2024 to set a new high. Analysts rate the stock as a Moderate Buy and trading at a fair value near current levels.
Compass Diversified pays a solid dividend with a 4% yield, so holding it is not without its rewards. The payout is 33% of profits, therefore reliable with a prospect of possible growth. The company is expected to post mid-single-digit revenue growth this year and next with a widening margin. Cash flow is solid, supporting balance sheet improvements and the dividend. Net worth improved by 11% in 2023 and could increase by another double-digit percentage in 2024.
Gates Industrial Corporation nears two-year high
Gates Industrial Corporation (NYSE: GTES) produces power transmission components and markets them throughout the world. Its insiders are buying shares even as major holders are selling them. The purchases of several directors and the CEO are not enough to offset the sales of Blackstone Inc. and Omaha Aggregator, but it doesn’t matter; price action is still moving towards new highs. The company is returning to growth and margin expansion, attracting the attention of analysts.
There aren’t many analysts covering this stock, but they are bullish. The nine tracked by Marketbeat.com peg the stock at Moderate Buy and see it trading about 15% higher than where it is today. Consensus sentiment and price target are trending higher and could take this market to a new three-year high by the end of this calendar year. The latest target is the highest issued by a major analyst: $21, an all-time high and a 50% upside.
Companies in this article:
| Agency | Current price | Price change | Dividend yield | P/E ratio | Consensus assessment | Consensus price target |
|---|---|---|---|---|---|---|
| Industrial Gates (GTES) | $15.37 | +4.6% | N/A | 18.08 | Moderate purchase | $16.81 |
| Diversified Compass (CODI) | $23.74 | +1.4% | 4.21% | 10.27 | Moderate purchase | $23.00 |
| First Citizens BancShares (FCNCA) | $1,572.06 | -1.8% | 0.42% | 2.00 | Moderate purchase | $1,620.67 |
Experience
Thomas Hughes has been working with InsiderTrades.com since 2019.
Areas of expertise
Technical Analysis, S&P 500; retail, consumer goods, consumer staples, dividends, high yield, small cap, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past experience
Market observer, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.