Insider trades can tell us a lot about where a stock is going. Corporate officers tend to sell as soon as their stock hits a top - and buy as soon as it bottoms out. As you can see above, the insiders at Target Corporation (NYSE:TGT) have turned surprisingly bullish on Target stock.
Do they know something we don’t? It certainly seems like it. Target’s insiders have rarely been wrong in the last year.
The Near-Perfect Track Record of Target Insiders
Those in Target’s inner circle have incredible foresight about what the stock is about to do. Until recently, that typically meant they would sell before something bad happened.
Last March, a group of insiders dumped more than $7 million in Target stock. The retailer had been on a strong uptrend for the last few weeks, so the selling seemed paradoxical at the time.
But two months later, the company revealed big drops in sales and revenue in a quarterly report. The stock sank to two-year lows, while those insiders were sitting pretty on their $7 million.
A similar situation played out a few months ago. In November and December, a pair of Target directors sold more than half a million dollars in company stock after a bullish run. Sure enough, a few weeks later, Target reported a significant drop in comparable store sales for the end of 2016.
Unfortunately, Target’s insiders have one fault on their record from the last year. At the end of the May sell-off, a director dumped almost $2.5 million. He must have thought the stock was going lower, but it had actually bottomed out shortly before his sale.
Target, like many other retailers, has been down on its luck lately. But a recent burst of insider trades implies that may soon change...
Do Insiders Think Target Stock Is Cheap?
Back in March, three executive officers and one director bought more than $1 million in their own stocks. Out of context, the move doesn’t make much sense - as is often the case with insider trades. Target is trading at multiyear lows, and the retail sector as a whole is in freefall.
However, there are already a few publicly visible signals that Target is righting the ship - and may outperform other struggling retailers in the next few months.
Its most recent quarterly report was promising, despite a small earnings miss. Target’s store traffic is on the rise again, and comparable digital sales increased by an impressive 34%. Plus, after last year’s sell-off, the stock is trading at just 10.66 times earnings.
Judging by the recent insider buying at Target, these positive signals might be signs of a bigger recovery to come.
Don’t forget... Target’s insiders have been right almost 100% of the time in the last year. But what if you had access to a list of insiders who had never lost money on a trade? Thanks to the hard work of Alexander Green and The Oxford Club Research Team, you can.