Insiders Say Restaurant Brands (QSR), Dollar Tree (DLTR), and TechnipFMC (FTI) Are Cheap

Insider buying remained muted last week, with just 271 purchases made during the week according to SEC filing data. With insider selling having intensified over the last month on growing fears of a devastating trade war on multiple fronts, the gap between insider selling and buying has continued to grow, reaching one of its widest gulfs in the last year.

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Restaurant Brands International Inc (NYSE:QSR)

Who Bought Shares: Director Golnar Khosrowshahi

How Many Shares Were Bought: 5,670 @ CAD 79.70 (USD 60.34)

Date of the Transaction(s): June 18

This insider purchase represents the first by Director Golnar Khosrowshahi, who has been the CEO of music publisher Reservoir Media since its founding in 2007. She was recently re-elected to Restaurant Brands International Inc (NYSE:QSR)’s board to serve another annual term, along with the other 11 incumbent Directors of that board.

The Canadian company, which owns Tim Hortons, Burger King, and Popeyes, has underperformed on the stock market over the last year, being down by 3%. However, shares have rebounded by over 10% since April 1 on strong first-quarter performance. Revenue of $1.25 billion and adjusted earnings of $0.66 each topped estimates by more than 10%.

Burger King and Popeyes were strong performers, with same-store sales rising by more than 3% during the quarter and revenue for each franchise rising by more than 10%. On the other hand, Tim Hortons has been stagnant, which the company hopes to address by testing out all-day breakfast at select locations, a strategy that has proved successful for McDonald’s Corporation (NYSE:MCD) in recent years. Restaurant Brands is also focused on introducing new products at all of its franchises throughout 2018.

On the next page we’ll look at two other stocks that insiders believe are cheap right now and which could outperform the market over the next year.

Dollar Tree, Inc. (NASDAQ:DLTR)

Who Bought Shares: Director Thomas Whiddon

How Many Shares Were Bought: 2,250 @ $88.78 per share

Date of the Transaction(s): June 18

Whiddon is the third insider of Dollar Tree, Inc. (NASDAQ:DLTR) to purchase shares of the company in June, following purchases earlier this month by Directors Jeffrey Naylor (3,000 shares) and Lemuel Lewis (2,500 shares). Furthermore, Thomas Saunders, who’s been a Director at Dollar Tree for 25 years, exercised options on 55,000 shares at the end of May and then held on to those shares, in stark contrast to his multiple insider sales late last year.

After pushing to $115 at the end of 2017, Dollar Tree, Inc. (NASDAQ:DLTR) shares have fallen all the way back to $87 in 2018. The discount retailer’s first-quarter same-store sales slumped by 1.1% and analysts are worried that sales could slump further should the number of Americans on food stamps (which accounted for about 5% of the company’s sales last year) continue to decline. As of March, there were 1.9 million fewer people on food stamps year-over-year.

TechnipFMC PLC (NYSE:FTI)

Who Bought Shares: Director John O’Leary

How Many Shares Were Bought: 2,000 @ $27.53 per share

Date of the Transaction(s): June 15

In addition to the Director’s June 15 purchase of 2,000 TechnipFMC PLC (NYSE:FTI) shares, he also received a grant of 5,441 restricted stock units the day prior, which will vest into one ordinary share per unit on June 14, 2019. Mr. O’Leary, who’s been a member of Technip’s board dating back to 2007, now has direct ownership of 14,455 shares.

TechnipFMC PLC (NYSE:FTI) has missed out on the rally in the energy space in 2018, with shares down by 2.2%. That’s not entirely surprising given the company’s underwhelming first-quarter results, which included negative free cash flow of over $250 million, the worst result among oilfield services companies and a stark contrast to a 2017 that saw it generate at least $100 million in free cash flow every quarter.

On the positive side, analysts believe that with more stable and robust oil prices, offshore activity should begin to pick up again.

Disclosure: None