In the 80’s TV show the A-Team, the leader of the team’s catchline at the end of every solved dilemma was, “I love it when a plan comes together.” Well, we love it when the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) buy together.
The CEO and the CFO are usually at the head of the executive hierarchy. One is supposed to oversee the direction of the company and the other its finances. When both agree that it’s time to buy the stock, it could be a sign that the plan is indeed coming together.
We like it even more when one has a history of buying his stock low and selling it when it’s higher… World Fuel Services Corporation (INT) CFO Ira Birns. In June 2008, Birns bought a total of 2,500 in two buys, one at $21.40 and the other at $22.59. (1) Five years later, he began selling more than $1.1 million through 2016, ranging from $38.77 to $44.95. Now, the CEO has turned buyer again with 2,000 shares at $31.59.
The CEO has a diffident sort of history and one that we term a change of heart. Michael Kasbar sold more than $53 million of INT from May 2006 though October 2019. (2) A sea of red without so much as a speck of blue until May 27, 2021, when he bought 10,000 shares for an investment of $314,000.
World Fuel Services engages in the distribution of fuel and related products & services in the aviation, marine, and land transportation industries worldwide, fueling everything from commercial airlines to international container & tanker fleets to commercial cruise lines to petroleum distributors & retail petroleum operators.
Wall Street believes the energy company will earn $1.42 per share (EPS) this year and $2.36 in 2022 with sales of $25.95 billion and $32.02 billion, respectively. (3) In the last half-decade, World Fuel Services traded with an average price to earnings (P/E) ratio of 17.31 and at 0.07 times sales (P/S).
If INT were to hit analysts’ 2021 EPS target of $2.36, the stock would trade at $40.85, approximately 21.22% higher than Monday, June 7, 2021, closing price of $33.70. At its five-year average P/S ratio, shares would only manage to trade at $35.45. Right now, INT is valued at 0.12 times revenue, which generates a potential price target of $60.77. Meanwhile, the energy company’s peer group trades with a P/S ratio of 0.5. That means, World Fuel Services could have an opportunity to expand its price to sales valuation closer to the industry average.
In addition to possible price appreciation, the company currently pays a dividend of $0.48 per year, a current annual yield of 1.42%. (4)
Overview: Business should improve for World Fuel Services Corporation (INT) as the planet recovers from COVID-19. Considering the insider histories of CFO Ira Birns and Michael Kasbar, shareholders have to speculate that INT’s prospects look good internally. At its lowest price potential, according to its five-year average P/S ratio, World Fuel Services offers investors the potential for average returns in the next 12 to 18 months and better than average using the typical P/E since 2016.
World Fuel Services Corporation (INT) could be appropriate for investors looking to benefit from a pickup in airline, cruise ship, and economic fortunes via an energy angle.
1 – https://www.secform4.com/insider-trading/1396673.htm
3 – https://finance.yahoo.com/quote/INT/profile?p=INT
4 – https://finance.yahoo.com/quote/INT?p=INT