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Zacks Investment Ideas feature highlights: lululemon, Dollar Tree and Caterpillar
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For Immediate Release
Chicago, IL – September 18, 2024 – Today, Zacks Investment Ideas feature highlights lululemon (LULU - Free Report) , Dollar Tree (DLTR - Free Report) , Caterpillar (CAT - Free Report) .
CEO Makes Huge Purchase of This Beaten-Down Stock
Investors closely monitor insider buys, as they can give hints surrounding the long-term picture.
An insider is an officer, director, 10% stockholder, or anyone who possesses internal information because of their relationship with the company. It’s critical to note that insiders have a longer holding period than most, and many strict rules apply to their transactions.
Several companies –lululemon, Dollar Tree and Caterpillar – have all seen recent insider activity. Let’s take a closer look at the transactions for those interested in trading like the insiders.
LULU CEO Invests $1 Million
Lululemon shares have been hit hard in 2024, down nearly 50% and unable to find any meaningful traction. Post-earnings reactions haven’t been great despite exceeding quarterly expectations.
The CEO must’ve seen some value, recently scooping up 4k shares at an overall transaction of roughly $1 million. The transaction was relatively large, bringing his total stake to nearly 90k shares overall.
Still, the company’s earnings outlook has been lowered across the board, not boding well for near-term share performance. The insider transaction appears to be more reflective of a longer-term outlook, and investors seeking short-term gains would likely be better off staying on the sidelines until positive earnings estimate revisions hit the tape.
The valuation picture has become more reasonable amid the poor performance, with the current 18.2X forward 12-month earnings multiple sitting well beneath the steep 35.2X five-year median. The stock traded at a premium for years thanks to its explosive growth.
The current PEG works out to 1.4X, near the low end of the five-year range.
Margins have also continued to recover nicely on a trailing twelve-month basis, as shown below. The company’s gross margin improved 80-basis points year-over-year throughout its latest quarter.
Other Recent Insider Buys
LULU hasn’t been the only stock seeing insider activity as of late, as construction heavyweight Caterpillar and retail player Dollar Tree have also seen buyers step up.
A director of Caterpillar recently made a small splash, acquiring 100 CAT shares at a total transaction value of just under $35k. Caterpillar shares have modestly outperformed the S&P 500 in 2024, gaining nearly 20%.
A director of Dollar Tree made a purchase in early September, scooping up 2.2k DLTR shares at a total transaction value of $150k. The stock’s outlook has been slashed across the board, landing it into an unfavorable Zacks Rank #5 (Strong Sell).
While the insider transaction is overall positive, the current outlook suggests near-term underperformance.
Bottom Line
Many investors closely monitor insider buys, looking to receive insights into the longer-term picture. The transactions shouldn’t be relied on for near-term performance, as insiders’ holding periods are longer than most and many strict rules apply.
Rather, investors can see insider buys as an overall net positive concerning the longer-term outlook.
All stocks above have seen recent insider activity.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: lululemon, Dollar Tree and Caterpillar
For Immediate Release
Chicago, IL – September 18, 2024 – Today, Zacks Investment Ideas feature highlights lululemon (LULU - Free Report) , Dollar Tree (DLTR - Free Report) , Caterpillar (CAT - Free Report) .
CEO Makes Huge Purchase of This Beaten-Down Stock
Investors closely monitor insider buys, as they can give hints surrounding the long-term picture.
An insider is an officer, director, 10% stockholder, or anyone who possesses internal information because of their relationship with the company. It’s critical to note that insiders have a longer holding period than most, and many strict rules apply to their transactions.
Several companies –lululemon, Dollar Tree and Caterpillar – have all seen recent insider activity. Let’s take a closer look at the transactions for those interested in trading like the insiders.
LULU CEO Invests $1 Million
Lululemon shares have been hit hard in 2024, down nearly 50% and unable to find any meaningful traction. Post-earnings reactions haven’t been great despite exceeding quarterly expectations.
The CEO must’ve seen some value, recently scooping up 4k shares at an overall transaction of roughly $1 million. The transaction was relatively large, bringing his total stake to nearly 90k shares overall.
Still, the company’s earnings outlook has been lowered across the board, not boding well for near-term share performance. The insider transaction appears to be more reflective of a longer-term outlook, and investors seeking short-term gains would likely be better off staying on the sidelines until positive earnings estimate revisions hit the tape.
The valuation picture has become more reasonable amid the poor performance, with the current 18.2X forward 12-month earnings multiple sitting well beneath the steep 35.2X five-year median. The stock traded at a premium for years thanks to its explosive growth.
The current PEG works out to 1.4X, near the low end of the five-year range.
Margins have also continued to recover nicely on a trailing twelve-month basis, as shown below. The company’s gross margin improved 80-basis points year-over-year throughout its latest quarter.
Other Recent Insider Buys
LULU hasn’t been the only stock seeing insider activity as of late, as construction heavyweight Caterpillar and retail player Dollar Tree have also seen buyers step up.
A director of Caterpillar recently made a small splash, acquiring 100 CAT shares at a total transaction value of just under $35k. Caterpillar shares have modestly outperformed the S&P 500 in 2024, gaining nearly 20%.
A director of Dollar Tree made a purchase in early September, scooping up 2.2k DLTR shares at a total transaction value of $150k. The stock’s outlook has been slashed across the board, landing it into an unfavorable Zacks Rank #5 (Strong Sell).
While the insider transaction is overall positive, the current outlook suggests near-term underperformance.
Bottom Line
Many investors closely monitor insider buys, looking to receive insights into the longer-term picture. The transactions shouldn’t be relied on for near-term performance, as insiders’ holding periods are longer than most and many strict rules apply.
Rather, investors can see insider buys as an overall net positive concerning the longer-term outlook.
All stocks above have seen recent insider activity.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.