Source: Pexels
It was a pathetic week for insider buying with about half of last week’s activity and most transactions
were small or institutional. Fortunately, there was one, like Underdog, that came to save the day.
Medpace Holdings, Inc. (MEDP) Chief Executive Officer (CEO) August Troendle bought twice, 22,290
shares on July 14 th  at $144.59 and another 8,330 shares at $145 for a combined $4,430,761. (1)
Medpace is a scientifically-driven, global, full-service clinical contract research organization (CRO)
providing Phase I-IV clinical development services to the biotechnology, pharmaceutical and medical
device industries. Medpace’s mission is to accelerate the global development of safe and effective
medical therapeutics through its high-science and disciplined operating approach that leverages
regulatory and therapeutic expertise across all major areas including oncology, cardiology, metabolic
disease, endocrinology, central nervous system and anti-viral and anti-infective.
Along with saving the day, the diagnostics and research CEO has an interesting history of trading MEDP.
It’s a predominantly one-sided history, sell, sell, sell and sell some more, but was on target with his
previous purchase.
Troendle’s first two MEDP trades were the only other times he bought. He bought more than $20 million
of the healthcare company’s stock in the middle of August 2016. The first trade was a whale, 869,565
shares at $23 for $19,999,995 (hard to believe he could bum $5 from a friend to make it an even $20
mil?). A few days later the CEO went small and picked up another 10,000 shares for $279,800.
Two-years later, the CEO broke the lid on selling in a big way, banking more than $43 million at $59.26
per share, more than doubling in price from where he bought. And then he sold another 77 times,
uninterrupted collecting more than $480 million (he could have paid his buddy back the $5 with 100%
interest).
According to Zacks, Medpace could get a boost in the near-term. Zacks analysis believes the medical
company could surpass Wall Street’s consensus estimate when they release the current quarter’s
financial report card on July 25th. The boutique research firm says its Earnings ESP forecasts results of
$1.42 per share versus Zacks’ $1.34 estimate. (2) It is not too often that you see insiders buy so close to
earnings reports.
While results are always important, it’s forward guidance that usually drives price movements. Longer
term, analysts forecast earnings per share of $6.23 for 2023, up from this year’s expected number of
$5.82. (3)
In the last half-decade, Medpace trades with an average price-to-earnings (P/E) ratio of 29.26, topped
out at 46.14 and bottomed at 19.32. If we apply MEDP’s recent P/E history to 2023’s consensus earnings
estimates, we get the following potential price targets.
1.      Max P/E: $287.45
2.      Average P/E: $182.29
3.      Low P/E: $120.36
As we type, Medpace Holdings, Inc. (MEDP) trades at $161.40 with a one-year price target of $138.00.
(4) The Cincinnati, Ohio based company doesn’t pay a dividend.
Overall: Medpace Holdings, Inc. (MEDP) could offer investors a solid risk to return ratio if the company
trades above its average P/E and closer to the five-year high. Otherwise, it’s an even balance between
upside and downside using the average and low price-to-earnings ratios.
With a five-year beta of 1.47 (5), MEDP is only appropriate for investors that have an above average risk
tolerance with a time horizon of two-years, based on CEO Troendle previous buying history.
1 – https://www.secform4.com/insider-trading/1622058.htm
2 – https://finance.yahoo.com/news/buy-medpace-medp-ahead-earnings-131401237.html
3 – https://finance.yahoo.com/quote/MEDP/analysis?p=MEDP
4 – https://finance.yahoo.com/quote/MEDP?p=MEDP
5 – https://finance.yahoo.com/quote/MEDP/key-statistics?p=MEDP
