Insiders know their company the best.
So, if they’re buying a good deal of shares, there’s often a reason for it.
However, don’t buy a stock just because an insider is buying. Do your own due diligence on the stock, both technically and fundamentally before jumping in.
Here are three you may want to dig into today.
Tesla
Tesla (SYM: TSLA) CEO Elon Musk bought nearly $1 billion worth of stock, reinforcing his push for greater control of the company. In fact, he picked up 2,568,732 shares at prices ranging from $371.38 to $396.54 a share.
This was also Elon Musk’s first open-market stock buy since February 2020 when we bought 13,037 shares for about $10 million.
Analysts at Wedbush also reiterated an outperform rating on the stock, noting that Tesla is in a pole position to be a winner in the “autonomous market opportunity, with robo taxis set to scale to 30 to 35 cities in the U.S. over the next year,” as noted by Seeking Alpha.
The firm has a price target of $500 per share for Tesla. However, we’d wait to buy TSLA on the next pullback – especially with it trading at 186x earnings.
Lyft
Lyft (SYM: LYFT) just bought 5,926 shares for $100,000 earlier this month, paying an average price of $16.875 per share.
While we would wait to buy the overbought stock on dips, there is a lot to like long term. For one, the company is still seeing strong demand with record bookings and rides. Most recently, the company saw a 12% year over year jump in record gross bookings at $4.5 billion. Rides were up 14% year over year to 234.8 million.
Also, Lyft’s valuation appears undervalued, trading at just over 1x sales with a price to growth flow multiple of 7.2 at the moment.
Dollar Tree
Dollar Tree (SYM: DLTR) CFO Stewart Glendinning picked up 17,000 shares of Dollar Tree for about $1.24 million. He paid an average of $72.83 per share earlier this year. He would buy another $342,130 worth of Nike stock in September, paying an average of $97.75 per share.
Citi analysts piled in with a buy rating, calling Dollar Tree a “dark horse winner in the new tariff world.” They added, “While Dollar Tree was previously trying to manage China tariffs within its current pricing architecture, this higher tariff regime gives them further cover to expand price points from $1.25 to $1.50 – $1.75,” as quoted by Seeking Alpha.
Earnings haven’t been too shabby either.
In the first quarter, the company’s adjusted EPS was $1.26, which was above its outlook range of $1.10 to $1.25. Revenue was up 11.3% thanks to 5.4% comparable sales growth. Plus, the company ended its quarter with $1 billion in cash and noted that buybacks exceeded $500 million year to date.
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Written by Ian Cooper