Investors are always looking for stocks that are poised to beat at earnings season and Danaher Corporation ((NYSE: DHR) may be one such company. The firm has earnings coming up soon, and events are shaping up quite nicely for their report.
That is because Danaher is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for DHR in this report.
The Most Accurate Estimate for the current quarter is currently at $1.08 per share for DHR, compared to a broader Zacks Consensus Estimate of $1.03 per share. This suggests that analysts have very recently bumped up their estimates for DHR, giving the stock a Zacks Earnings ESP of +4.85% heading into earnings season.
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock before a period of weak performance. So, before you buy or sell Danaher Corporation (NYSE: DHR), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We do not think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise’.
Danaher Insider Transactions Over the Last Year
The Co-Founder & Director Mitchell Rales made the biggest insider purchase in the last 12 months. That single transaction was for US$23m worth of shares at US$167 each. That means that an insider was happy to buy shares at around the current price of US$182. Of course, they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today’s share price, as the discount to value may have narrowed with the rising price. The good news for Danaher shareholders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Mitchell Rales.
Mitchell Rales purchased 145.15k shares over the year. The average price per share was US$164. You can see the insider transactions (by companies and individuals) over the last year depicted in the link below. You can see all the insiders’ transactions, including the share price, individual, and the date!
Insiders at Danaher Have Bought Stock Recently:
Over the last three months, we have seen significantly more insider buying, than insider selling, at Danaher. In total, Co-Founder & Director Mitchell Rales bought US$23m worth of shares at that time. But insiders only sold shares worth US$7.6m. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of Danaher:
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Danaher insiders own about US$15b worth of shares (which is 11% of the company). I like to see this level of insider ownership because it increases the chances that management is thinking about the best interests of shareholders.
So, What Does This Data Suggest About Danaher Insiders?
The recent insider purchase is heartening. We also take confidence from the longer-term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Danaher. One for the watchlist, at least! So, while it is helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. You would be interested to know, that we found 1 warning sign for Danaher and we suggest you have a look…
Danaher Corporation LONG (Buy)
ENTER AT: 187.59
The signal is based on information from the following link: