We recently published a list of 10 Stocks Insiders Are Buying In March. In this article, we are going to take a look at where Ultra Clean Holdings, Inc. (NASDAQ:UCTT) stands against other stocks that insiders are buying in March.
As President Donald Trump’s on-again, off-again tariff policy continues, so does turbulence in the stock market. The broader market declined by 10.1% from its record close in February, officially entering a correction.
According to Adam Turnquist, chief technical strategist for LPL Financial, uncertainty about tariffs is among the main culprits behind the selling pressure. This week, all three major indexes have declined by more than 4%, reports CNBC.
On Wednesday, the Bureau of Labor Statistics reported that February’s prices for food and services rose less than many experts expected. The consumer price index increased by a seasonally adjusted 0.2% for the month, bringing the annual inflation rate to 2.8%, slightly below economists’ projections.
Amid all this uncertainty, the question is: Could this be the right time to buy the best stocks? History has shown that buying undervalued stocks often presents great growth opportunities. Will there be growth soon? It’s hard to predict, though some analysts are betting on the growth potential of AI technology.
At times like these, it might be useful to look over recent insider trades, because executives usually have more insights into their companies. For example, when a CEO or CFO buys company stock, it can indicate strong confidence in the business’s future.
Conversely, insider selling doesn’t always indicate a lack of confidence; it can result from personal financial needs or efforts to diversify investment portfolios. Executives often carry out these transactions through pre-arranged plans (such as 10b5-1 plans), designed to prevent any perception of improper timing.
While insider activity can provide valuable insights, it’s crucial to evaluate it alongside other factors, including the company’s financial health, market trends, and industry developments.
Our Methodology
To identify the 10 stocks insiders are buying in March we used Insider Monkey’s insider trading stock screener and looked for stocks where at least three insiders bought shares this month. With each stock, we note the number of insiders who recently bought shares and the company’s market capitalization.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician inspecting a series of critical ultra-high purity components.
Ultra Clean Holdings, Inc. (NASDAQ:UCTT)
Number of Insiders Buying: 5
Market Capitalization: $1.11 billion
The seventh stock among the 10 that insiders are buying this month is a semiconductor company, Ultra Clean Holdings, Inc. (NASDAQ:UCTT). The Hayward, California-based company makes subsystems parts, and ultra-high purity cleaning and analytical products for the semiconductor industry. Its offering includes chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics and process modules, high-level assemblies, and other precision components that ensure the integrity and performance of semiconductor manufacturing. It is also one of the 12 small-cap semiconductor stocks to buy now.
In March, five insiders bought a total of $543,269 worth of Ultra Clean shares at an average price of $24.78 per share. Currently, the stock is trading at $25.38 having declined 29.40% year to date, and 40.97% over the past 12 months.
For the full year of 2024, Ultra Clean (NASDAQ:UCTT) disclosed revenue of $2.1 billion, compared to $1.7 billion in 2023. Total gross margin was 17.0%, operating margin was 4.3%, and net income was $23.7 million. This compares to gross margin of 16.0%, operating margin of 2.0%, and net loss of $31.1 million or $0.70 loss per diluted share in the prior year.
The consensus rating for Ultra Clean (NASDAQ:UCTT) stock is “Strong Buy” with a price target of $56.75, according to StockAnalysis.
Overall, UCTT ranks 7th on our list of stocks that insiders are buying in March. While we acknowledge the potential of UCTT, 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 UCTT 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.