We recently published a list of 10 Mid-Cap Stocks Insiders Are Buying Recently. In this article, we are going to take a look at where Smithfield Foods, Inc. (NASDAQ:SFD) stands against other mid-cap stocks insiders are buying recently.
Why is it important to keep track of insider trading activity? Insiders, meaning people in high positions, such as executives and directors, have valuable insights into the company’s strategic moves, plans and initiatives. When, for example, a CEO invests their own capital in company stocks, it can indicate strong confidence in the company’s future results.
It is important to note that behind insider selling can be various other motives, that’s why insider trading activity should be assessed within the broader context of the company’s fundamentals, industry trends, and overall market conditions. Many insider purchases don’t necessarily mean the company will be successful. That’s why due diligence before any investment is of crucial importance. Investors should also take into account and carefully analyze underlying reasons for insider transactions. However, insider trading activity in combination with other relevant factors can offer precious insights into a company’s capabilities, helping investors make more informed investment decisions.
To come up with the 10 mid-cap stocks insiders are buying recently, we only considered stocks with a market capitalization of between $2 to $10 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders buying over the last three months.
With each stock we note the number of recent insider purchases and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Smithfield Foods, Inc. (NASDAQ:SFD)
Number of Insiders Recently Buying: 10
Market Capitalization: $8.424B
This leading global food company and one of the world’s largest pork processors and hog producers just went public this January. This explains the huge insider trading activity, with as many as 10 insiders, including the President and CEO, CFO, and CBO recently buying its shares. Together they acquired $65.68 million worth of Smithfield Foods (NASDAQ:SFD) shares at a price of $20 per share. Currently, the stock is trading at $21.82 per share.
Simthfield’s director Long Wan bought 3.2 million shares, investing $64.00 million in the company. This indicates the management’s confidence in the company’s potential.
The company operates a diverse portfolio of well-known brands, including Smithfield, Eckrich, Nathan’s Famous, Farmland, Farmer John, and Armour. It has a long tradition, being founded back in 1936, as Smithfield Packing Company.
According to Wall Street Journal data, analysts have a favorable view of Smithfield Foods (NASDAQ:SFD), with an average 12-month price target of $34.00, suggesting a potential upside from the current price. However, since the company just went public, more analyst data coverage is expected to develop over time.
Overall, SFD ranks 1st on our list of mid-cap stocks insiders are buying recently. While we acknowledge the potential of SFD, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SFD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
