We recently compiled a list of the 10 Mid-Cap Stocks Insiders Are Selling Recently. In this article, we are going to take a look at where Loar Holdings Inc. (NYSE:LOAR) stands against the other feminist stocks. We previously covered 10 Mid-Cap Stocks Insiders Are Buying Recently.
Why should investors analyze insider trading activity? Insiders, or people in high positions within a company—such as executives and directors—can have crucial 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.
What does it mean when insiders are selling their shares? It doesn’t necessarily mean bad news for the stock. Sometimes, large shareholders just want to trim their holdings to more appropriate position sizes based on the risk/reward potential.
It is important to note that both insider selling and buying can be driven by various motives. Therefore, any insider trading activity should be analyzed 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 the utmost 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 valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
To identify the 10 mid-cap stocks insiders are selling recently, we considered only stocks with a market capitalization of between $2 billion and $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 two months.
With each stock we note the number of recent insider sales 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)
A satellite in orbit, capturing the technological prowess of the aerospace & defense company.
Loar Holdings Inc. (NYSE:LOAR)
Number of Insiders Selling: 13
Market Capitalization: 7.13B
An aerospace and defense company, Loar Holdings, is one of the mid-stocks that insiders have been selling over the last two months. What happened is that the company announced the pricing of its upsized public offering of 5.75 million shares of common stock, including 1.9 million shares offered by certain stockholders and 3.85 million shares offered by Loar at $85.0 per share.
Most likely, as part of the upsized offering, on December 12th, 13 insiders, including Executive Co-Chairman sold around $530.62 million worth of Loar Holdings shares at a price of $81.18 per share. The stock is currently trading at $77.84, having gained 5.32% since the beginning of the year.
The combination of stockholder selling and the company issuing new shares often happens in public offerings. In the case of Loar Holdings’ offering, the company noted it will not receive any of the proceeds from the sale of stock offered by the selling stockholders. From collected net proceeds from newly issued shares sold, it plans to repay borrowings outstanding under its credit agreement.
For the third quarter of 2024, the company reported net sales of $103.5 million, up 25.0% compared to the prior year’s quarter. Adjusted EBITDA was of $38.1 million, up 31.8% compared to same quarter of 2023.
In August, Laor completed the acquisition of Applied Avionics, Inc. for approximately $385 million in cash. Applied Avionics designs, develops, and manufactures highly engineered interface solutions for avionics and other aerospace and defense electronics. Applied Avionics’ brands, Vivisun and Nexsys are the common choice of leading aircraft retrofit providers, military prime contractors, and Tier 1 suppliers.
According to data from four analysts, the average rating on Loar Holdings stocks is “Strong Buy,” with a 12-month stock price target of $85.5. Over the past 12 months, the company’s shares gained 59.51%,
Overall LOAR ranks 1st on our list of the mid-cap stocks insiders are selling recently. While we acknowledge the potential of LOAR as an investment, 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 LOAR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
