TipRanks
7 min read
In This Article:
Investors searching for quality stock opportunities often look for reliable signals, and few are as telling as insider activity. Corporate insiders, such as top executives and directors, have an intimate understanding of their company’s performance and prospects. When these insiders buy or sell shares, it can offer a powerful glimpse into their confidence – or concern – about what lies ahead.
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To ensure transparency and fairness, federal regulators require insiders to publicly disclose their trades. These filings give everyday investors a unique chance to track where the people closest to the business are putting their money. And when insiders make substantial purchases it’s typically because they have strong conviction that the stock is poised to rise.
With this in mind, we turned to TipRanks’ Insiders’ Hot Stocks tool to identify promising names that insiders are actively buying. What we found: two market-beating stocks (both are up over 20% this year), solid upside potential, and recent million-dollar insider purchases. Here’s a closer look at the names drawing insider confidence.
Starz Entertainment (STRZ)
The first stock we’ll look at is new to the public trading markets, having gone public through a spinoff transaction that was completed early in May. Lionsgate Entertainment, a long-time stalwart of the film and music industry, split its motion picture and television studio operations and its premium subscription service business ops into two separate entities. The subscription business, Starz, is now trading as an independent company, and debuted on the NASDAQ index on May 7.
Starz operates a TV streaming business, offering a variety of popular franchises and series. As a point of differentiation in a crowded industry, Starz bills itself as “the leading premium entertainment destination for women and underrepresented audiences,” and its programming mix is designed to appeal to a discerning adult audience. Starz prides itself on its programming lineup, which it describes as including “boundary-breaking” originals as well as blockbuster movies.
After going public, Starz released its first set of financial results on May 29. The release covered FQ4 and the full fiscal year that ended this past March 31. For the fourth quarter, Starz reported total revenues of $330.6 million. At the bottom line, the company had a net quarterly operating loss of $136.3 million, and a positive OIBDA (Operating Income Before Depreciation and Amortization) of $93.3 million.
