Keeping a vigilant eye on insider trading can often pave the way to profitable investment strategies. Esteemed investor, Peter Lynch, was famously quoted saying, “While insiders could sell their shares due to various reasons, they buy them for one sole purpose: they anticipate a rise in the stock price.” Company insiders, such as officers and board members, have access to exclusive information about their businesses that can potentially influence the movement of stock prices. However, they are legally obligated to disclose their personal stock holdings to the public.
We have leveraged the Insiders’ Hot Stocks tool from TipRanks to pinpoint two stocks demonstrating promising insider buying signals that warrant further investigation: Plains GP Holdings (PAGP) and Black Stone Minerals (BSM). These companies are recognized for their high dividend yields, making them attractive investment propositions for income-focused investors.
Plains GP Holdings (PAGP)
Plains GP Holdings, a key player in the oil sector, has witnessed a consistent 10% uptick in its share price since the beginning of the year. The company holds a significant general interest in Plains All American (PAA), a prominent midstream company that facilitates the transportation of crude oil and natural gas within the US hydrocarbon transport system.
Although the company’s Q1 2023 revenue slightly dipped compared to the previous year, their net earnings skyrocketed, tripling year-on-year. The robust free cash flow of the company, coupled with its generous 8% dividend yield, makes it a compelling investment option. This perspective is further validated by the recent acquisition of 75,000 shares by the company’s CEO, Willie Chiang, involving an investment exceeding $993K.
Black Stone Minerals (BSM)
Black Stone Minerals, a limited partnership known for dealing in mineral rights, is another high-dividend stock supported by insider purchases. The company generates income via royalties from its valuable land assets in prolific oil and gas production basins. Despite an adverse economic climate, the company has sustained profitability, registering revenues of $663.6 million in the previous year, marking an astounding 85% increase year-over-year.
Moreover, the company’s distributable income in Q1 2023 ensured the maintenance of the dividend, which was announced in April for a payout on May 19. The dividend amounting to 47.5 cents per common share provides an impressive yield of 12.5% based on an annualized payment of $1.90. Thomas Carter, Black Stone’s CEO, recently invested $494,000 to acquire 31,800 shares of BSM.
Observing the actions of corporate insiders in the stock market can offer valuable cues to investors. Echoing Peter Lynch’s philosophy, insiders only invest in shares when they predict an upward trajectory in the stock price. Both Plains GP Holdings and Black Stone Minerals, with their noteworthy insider purchases and substantial dividend yields, present potential investment opportunities for income-oriented investors.
In summary, monitoring insider transactions can serve as a beneficial tool for investors in search of promising stock market prospects. The recent insider acquisitions at Plains GP Holdings and Black Stone Minerals highlight the potential of these high-dividend yield stocks. Although these actions don’t guarantee a win, they certainly signify a vote of confidence from those most familiar with the company. As always, investors are urged to conduct thorough analysis before making any investment decisions. As Peter Lynch astutely advised, tracking insider activities can often provide a profitable lead on a stock’s future direction.
©traders-news.online
