Insider Buying Says Travelport (TVPT), Yext (YEXT), and Kratos (KTOS) Are Undervalued

Travelport Worldwide Ltd (NYSE:TVPT)

Who Bought Shares: President & CEO Gordon Wilson and EVP & CFO Bernard Bot

How Many Shares Were Bought: 6,900 @ $14.42 each and 6,900 @ $14.40 each

Date of the Transaction(s): March 19 and 20

The (nearly) identical purchases by Travelport Worldwide Ltd (NYSE:TVPT)’s leading executives are the first registered by any of the company’s insiders in two-and-a-half years. The timing is also rather unusual for concerted insider buying, given that the stock has gained 16% since February 9, when it hit six-month lows.

Nonetheless, the executives are clearly expressing confidence in Travelport’s performance and what that should mean for shares in the future. Addressing the company’s fourth-quarter financial results in late-February, CEO Wilson stated that Travelport Worldwide Ltd (NYSE:TVPT)’s revenue growth is on a “great trajectory”, forecasting a 7% to 10% revenue rise in 2018 after a 4% rise in 2017. Wilson praised the company’s performance in the Asia and Latin America markets, where it won new business, which contributed towards a record 2017 on that front.

Yext Inc (NYSE:YEXT)

Who Bought Shares: Tippet Venture Partners II

How Many Shares Were Bought: 1 million @ $12 per share

Date of the Transaction(s): March 21

Tippet Venture Partners II’s Insider Connection to Yext Inc (NYSE:YEXT): Yext Director Andrew Sheehan is the managing director of TPV II’s general partner, which now owns 1 million shares (the amount purchased on March 21). Sheehan fills the same role for Tippet Venture Partners, which already owned 447,048 shares of Yext. Sheehan has further indirect ownership of just under 385,000 shares and direct ownership of 10,845 shares.

Yext Inc (NYSE:YEXT) Quarterly Results Open Path to Million-Share Purchase: Yext shares cruised to a three-month high above $13.50 just before the company’s fiscal 2018 fourth-quarter results were released after the market close on March 8. The following day, they lost over 7% of their value and continued to slide further over the ensuing days.

As the quarterly results and fiscal 2019 guidance were all squarely within the range of estimates, it’s unclear what aspect of Yext’s earnings the market took issue with. Gross margin in the company’s fiscal fourth quarter ended January 31, 2018, rose by 1.9 percentage points to 74.6%, while revenue jumped by 35% to $48 million. Yext’s non-GAAP net loss did widen to $44.2 million during its fiscal 2018 from a $33.3 million loss a year earlier, due in part to greater marketing and customer outreach efforts.

Disclosure: None