Christopher Hilger, a director at Donaldson Company (DCI), recently added 3,186 shares. The buy increased his holdings by 68 percent, and came to a total cost just under $200,000.
This marks the first insider buy at the company over the past two years. Generally, insiders have been sellers of shares after exercising stock options. There have been a few outright sales a well, including one from the company President for 4,500 shares back in January.
Insiders own 0.4 percent of the specialty machinery and filtration equipment company.
Shares have already rallied 25 percent in the past year. Earnings are up by nearly 20 percent, and shares trade at about 19 times forward earnings, slightly better than the overall S&P 500.
The company’s products are useful for construction, mining, agriculture and aerospace needs, which make them somewhat recession resistant. That’s likely a reason why shares have been trending higher in a weak economy, and why they’re likely to continue to trend higher.
Action to take: shares pay a 1.5 percent dividend here, on top of any further capital gains. Plus, with a market cap under $10 billion, a bigger industrial company may consider the company a takeout target in the future.
For traders, the August $70 calls, last going for about $2.30, could deliver mid-double-digit gains on a further rally in shares in the next four months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.