Insider buying stayed steady last week as we enter Thanksgiving week. There were a few purchases that we looked at with a pair making the final cut. Oportun Financial Corporation (OPRT), a credit services company that offers personal loans, auto loans, and credit cards, might be worth investors’ consideration.
However, we are going to focus our attention on Avantor, Inc. (AVTR). Avantor is a Fortune 500 company and is a leading global provider of mission-critical products and services to customers in the biopharma, healthcare, education & government, and advanced technologies & applied materials industries. Its portfolio is used in virtually every stage of the most important research, development and production activities in the industries they serve.
Last week, AVTR’s top executives bought a combined 27,500 shares of the basic materials company. Chief Executive Officer (CEO) Michael Stubblefield acquired 15,000 shares at $20.95 for an investment of $314,250. The CEO was joined by Chief Financial Officer (CFO) Thomas Szlosek who picked up 12,500 shares at $20.71, spending $258,850. (1)
It’s the first time both C-Suite executives have bought stock. Prior to last week’s activity, CEO Stubblefield sold AVTR shares three times, collecting $35.5 million. (2) His colleague, CFO Szlosek unloaded close to $10.3 million of Honeywell International Inc. (HON) as his only other insider transactions. (3)
Stubblefield’s Avantor sales spanned 10 months, from December 2020 through September 2021 and were between $27.15 and $42.37 per share. His sale at $42.37 was within arm’s length of its all-time high of $44.37. It’s encouraging to see that the CEO has good timing and was on the right side of the trade, so to speak.
Wall Street’s one-year consensus price target of $26.61 (4) suggests the CEO could be on the right side of the trade again. AVTR trades at $20.88 as we type. Analysts forecast earnings per share (EPS) of $1.42 in 2023, up slightly from $1.39 this year. Meanwhile, sales are expected to slip from $7.51 billion to $7.48 billion.
In the past five years, Avantor traded with a price to earnings (P/E) range of 13.52 on the low end and 34.53 on the high end, while averaging 27.89. Armed with recent history, we can put together a likely price range for AVTR in the next 12-18 months based on next year’s consensus earnings estimate.
High P/E: $49.03
Average P/E: $39.60
Low P/E: $19.19
In the past 52 weeks, Avantor, Inc’s 52-week high is $42.48 with a 52-week low of $17.91. All of the potential price points outlined above fall within the past 12-months range. As of now, the company doesn’t pay a dividend.
OVERALL: Avantor, Inc. (AVTR) appears to have limited downside based on 2023’s earnings forecast and the company’s half-decade low P/E. Perhaps, that could be one of the reasons CEO Stubblefield and CFO Szlosek bought stock for the first time.
With a five-year beta of 1.37 (S&P 500 beta is 1), AVTR is only appropriate for investors with an above-average risk tolerance and a time horizon into 2024.
1 – https://www.secform4.com/insider-trading/1722482.htm
2 – https://www.secform4.com/insider-trading/1776153.htm
3 – https://www.secform4.com/insider-trading/1293167.htm
