As global markets experience broad-based gains, with U.S. indexes approaching record highs and smaller-cap indexes outperforming large-caps, investor optimism is buoyed by strong labor market reports and rising home sales. Amidst this positive sentiment, growth companies with high insider ownership are attracting attention as insiders demonstrate confidence in their businesses despite geopolitical uncertainties. In the current market environment, stocks with significant insider ownership may be appealing due to the alignment of interests between company leaders and shareholders.
Top 10 Growth Companies With High Insider Ownership
Overview: Solum Co., Ltd. is a company that produces and sells power modules, digital tuners, and electronic shelf labels both in South Korea and globally, with a market capitalization of approximately ₩1.03 trillion.
Operations: The company's revenue is derived from two main segments: the ICT Business, contributing ₩432.21 million, and the Electronic Components Division, generating ₩1.14 billion.
Insider Ownership: 16.6%
Earnings Growth Forecast: 53.2% p.a.
Solum's earnings are projected to grow significantly at 53.17% annually, surpassing the KR market average of 29.3%. Despite a decrease in profit margins from 5.8% to 2.8%, the company is trading at a substantial discount, approximately 40.6% below its fair value estimate. Recent share buybacks amounting to KRW 3,356.47 million highlight ongoing capital management efforts, although insider trading activity has been minimal over the past three months.
Overview: Stadler Rail AG, with a market cap of CHF1.92 billion, manufactures and sells trains across Switzerland, Germany, Austria, Europe, the Americas, CIS countries, and other international markets.
Operations: The company's revenue segments include Signalling with CHF135.68 million, Rolling Stock contributing CHF3.10 billion, and Service & Components generating CHF789.41 million.
Insider Ownership: 14.5%
Earnings Growth Forecast: 22.9% p.a.
Stadler Rail's earnings are forecast to grow significantly at 22.94% annually, outpacing the Swiss market average of 11.4%. Despite a volatile share price recently, the company is trading at a substantial discount, approximately 48.3% below its fair value estimate. However, its dividend yield of 4.69% is not well covered by free cash flows. No significant insider trading activity has been reported in the past three months.
Overview: Redcare Pharmacy NV operates as an online pharmacy across several European countries including the Netherlands, Germany, Italy, Belgium, Switzerland, Austria, and France with a market cap of approximately €3 billion.
Operations: The company's revenue is divided into two main segments: DACH, which generated €1.82 billion, and International, which brought in €410.50 million.
Insider Ownership: 17.2%
Earnings Growth Forecast: 61.5% p.a.
Redcare Pharmacy's revenue is forecast to grow at 17.6% annually, surpassing the German market average of 5.6%. The company recently raised its sales guidance for 2024, expecting between €2.35 billion and €2.5 billion in total sales, despite reporting a net loss of €18.98 million for the first nine months of the year. Trading significantly below its estimated fair value, Redcare is projected to achieve profitability within three years with earnings growth at 61.52% annually.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.The analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years.
Companies discussed in this article include KOSE:A248070 SWX:SRAIL and XTRA:RDC.
