Stock Picks: PANW, TCRD, EVLV

By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

 

In our latest reviews, we highlighted the importance of insider transactions, which may lead to very high yield in the respective stocks. Today, we will again review the stocks with high insider activity. We won’t consider biotech companies here, as they may be very risky.

Palo Alto Networks (NYSE: PANW)

Number one by trading volume is Palo Alto Networks, quoted as PANW on NYSE. It belongs to the Technology (Networking & Communication Devices) sector. The insiders bought shares worth $13,380,262 in June.

Palo Alto Networks was founded in 2005 and is based in Santa Clara, California. It specializes in developing cyber security platforms for business throughout the world. As of now, PANW caters to over 50,000 customers in 150 countries.

Palo Alto Networks is a large company, although its IPO took place as recently as in July 2012.

In 2017, its earnings amounted to $1.8B, which is 28% more than in 2016. Through 2011-2016, Gartner named Palo Alto Networks as the leader in cyber and computer security. In 2016, Bay Area, an SF Business Times agency, named Palo Alto Networks as ‘the best place to work at’. Currently, over 5,100 people are employed with PANW.

Arora Nikesh, PANW CEO, bought shares worth $13,380,262 at $198.79 to $216.07. Curiously enough, Nikesh became CEO on June 6, and began buying shares as soon as on June 8. Before coming to PANW, Arora Nikesh was Executive Director at Google, and sold some Google shares in April.

It looks like Mr Nikesh got some free capital after selling Google and wanted to invest it as soon as possible. Eventually, after becoming CEO at Palo Alto Networks, he decided to buy some shares at his new company.

Financially, PANW is very reliable, with all latest earnings reports exceeding expectations of both the management and the analysts.

Over the last week, the stock broke out its historic resistance at $200 and is currently still growing.

On D1, the price broke the 200-day SMA as early as in mid 2017, and ever since there have been no resistance that could stop it. The ascending trend is still here to stay; with the record highs hit, there is no immediate resistance, while the support is at $200.

Meanwhile, the short float is as low as 4.93%.

THL Credit (NASDAQ: TCRD)

THL Credit, quoted as TCRD on NASDAQ, is our number two for today. This company belongs to the Financial (Asset Management) sector. The insiders bought shares worth $848,922 in June.

THL Credit was founded in 2009, and is headquartered in Boston, Massachusetts. This investment firm manages a total of $12.1B. THL Credit has regional offices in Chicago, Dallas, Los Angeles, and New York City. The company majorly invests funds into mid-price securities, which are chiefly stocks of the companies with a yearly turnover of at least $25M. THL Credit does not invest into startups or companies with large debts. The initial investment amount is $10M to $25M.

TCRD Q1 earning reports came positive, with a revenue of $16.7M; still, the stock price did not go up, as the analysts had expected the earnings to be at $18.3M. When the reports came out, the stock price went down by 13%. It may seem strange, as good earnings usually should mean the stock price rise, but, in practice, good news does not always lead to this.

Insider transactions were made by the Chief Operations Officer, Olson Terrence, who bought some THL Credit shares as early as in Sep 2017; by then, the price was $9 per share, and the total amount was $17,579. The next SEC report by Terrence came in March 2018, with shares worth $10,263. On the same day, two other board members bought shares worth $136,680 at around $8.20.

Terrence continued buying shares on April 16, and such buys occurred nearly everyday, up to now, with the minimum amount of $60,000 and the maximum at $139,000. We may soon learn the reason for such massive buys by Olson Terrence, as no other board member did it.

Technically, there is an descending trend, with the price being below the 200-day SMA. However, there is also a consolidation pattern formed since March between $7.70 and $8.00. On June 7, THL Credit broke out the support at $8.00 but failed to go through the resistance at $8.40, and is currently testing the upper boundary again.

EVINE Live (NASDAQ: EVLV)

EVINE Live (NASDAQ: EVLV) takes the third place today. This company belongs to the Services (Catalog & Mail Order Houses) sector. When it comes to insider transactions, it falls behind the leaders, with the total amount of just $52,572.

EVINE Live was founded in 1990 and is headquartered in NYC. The company focuses on selling goods via web, TV, mobile apps, and social networks. Through EVINE Live, one can buy jewelry, home appliances, textile, kitchenware, accessories, footwear, etc. The company has access to over 86M of homes through television, while also offering their products on evine.com.

EVINE Live issued its Q1 earnings report on May 30. The net sales came at $156.50M, which is 0.1% more than in Q1 2017, when the sales were $156.30M. However, the increase in sales did not help the company to make any profit, and its loss for Q1 2018 was $3M, which is 7% more than in Q1 2017. Overall, Q1 reports are far from optimistic.

However, two board members did buy shares, although the amounts are not that high, those being $6,032, $22,834, and $23,706. Before that, insiders bought shares as long ago as in Dec 2017, and the share price did not go up. What really matters here, though, is the current price, which is just $1.18; as long as it goes up by just 2 or 3 dollars, the yields will get doubled or tripled. Perhaps this is the very reason why the insiders bought the shares, while there may be some other reasons for that, of course.

Back in 1998, EVLV price broke out the 200-day SMA and had been growing for around two years. The price went from $4 up to $65, with the yield being 1,500%, although it had been trading for long below $5. This may repeat any time in the future.

Currently, the price is making its second attempt to break out the 200-day SMA and form an ascending trend. The support is at $0.90, and the immediate resistance lies at $1.60.

Short positions are scarce, with the short float being below 1%.

 

Disclaimer

Any forecasts contained herein are based on the authors’ particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

 

Having majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.