Indoor activity is hot in names like Vestis New York Stock Exchange: FSTSOPKO Health Nasdaq:OBKand Greif, Inc. New York Stock Exchange: Global Environment FacilityAnd investors should pay attention. From board members to CEOs, CFOs and other company officials, insiders are buying these stocks en masse, indicating above-average conviction in the stock price outlook.
The question for investors is whether these stocks are good buys for 2025 and how much their share prices might rise. In two cases the answer was very high because of strong support from analysts, institutions and individual investors. In the other case, investors may want to avoid the stock because the risk of dilution is high. This is why.
Vestis is on track for acquisition
Dress today
(As of 12/30/2024 at 05:17 PM ET)
- 52 week range
- $8.92
▼
$22.37
- Dividend yield
- 0.92%
- P/E ratio
- 95.38
- Price target
- $15.73
Vestis is the former consolidated part of Aramark that was created in late 2023. The company is equal in size to peer UniFirst but less than a third the size of industry leader Cintas, making it a potential merger or takeover target. The uniform industry remains fractured despite years of consolidation. Cintas is a potential buyer who has not yet entered the mix. As it stands, several buyout firms have expressed interest, but no firm offers are on the table.
Insiders have been buying Vestis throughout 2024, making it the most purchased stock by corporate executives. Nine insiders made 14 purchases during the year, taking their total holdings to more than 13%. In addition to this, institutional ownership reached approximately 98% in late December 2024.
Institutions also bought net shares in CQ1, Q2 and Q3 this year. The largest shareholder is activist hedge fund Corvex Management. Corvex has made several purchases in 2024, owns more than 13% of the stock and may continue to buy into 2025.
Insiders and institutional interest in Vestis is tied to the company’s cash flow potential. Cintas is an example of a company able to maintain its dividend, increase distribution, share repurchases, and a strong balance sheet with reinvestment and self-financing growth.
Vestis pays a healthy dividend of less than 25% of its profits and has a strong balance sheet. It has not yet bought back significant shares but may begin to do so if it is not acquired or taken private.
OPKO Health has many catalysts ahead
OPKO Health Today
(As of 12/30/2024 at 05:45 PM ET)
- 52 week range
- $0.85
▼
$1.76
- Price target
- $2.75
OPKO Health has several catalysts that could cause its stock price to skyrocket in 2025. However, the company’s capital position is questionable, and it may not have the funds to continue without positive development. This could include major therapy approvals, acquisitions and normalization of the diagnostics business. Analysts are optimistic, so there is hope. MarktBeat.com tracks three analysts with current valuations; They peg the stock to the buy price and see it advance 90% on consensus.
Risks include diluting shareholders that insider buying only partially compensates. Insider activity for 2024 includes 24 purchases by seven insiders, making it the second most bought stock of the year. However, the company’s stock sales to raise capital increased the number by more than 32%. The company has since issued a stock buyback authorization, but $100 million is not enough to offset the damage, and more sales may come.
Greif insiders are laying ground on the market
Griff today
(As of 12/30/2024 at 05:26 PM ET)
- 52 week range
- $55.95
▼
$73.16
- Dividend yield
- 3.55%
- P/E ratio
- 13.44
- Price target
- $78.67
Greif, Inc. is an industrial services company specializing in packaging. Its stock price has been volatile over the past couple of years but is showing a strong bottom near $60. This bottom is reinforced by insider activity, which has the stock being bought at the low end of the range and sold at the high end. Insider buying includes the CEO, CFO and several directors.
Insider Selling is Senior Vice President; Its transactions were early in the year and consistent with stock-based compensation, so no red flag for investors. Insiders own about 3% of this industrial packaging company.
Institutional activity increases volatility in 2024. Institutions own about 50% of shares; Their activity in 2024 is aligned with buying in the low range and selling in the high range. Activity in the fourth quarter is bullish and rising, confirming the bottom and indicating another rebound in the stock price.
Analysts also point to a rebound in stock prices. Marketbeat tracks seven analysts who peg the stock with a Moderate Buy consensus and view it as deep value, trading below its lowest price target. The value of a move to match the analyst’s minimum target is about 10% of the upside as the stock approaches the minimum; Moving to consensus would add another 20%.
A likely catalyst for the move is 2025 results, which are expected to include a wider spread.
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