Free Trial

Big Buybacks Announced: 3 Stocks Insiders Are Banking On

Money exchange stock buybacks

Key Points

  • The latest stock buyback programs will show investors which stocks insiders consider cheap and why they could rally.
  • Three stand out from the pack, backed by fundamental and technical tailwinds.
  • Wall Street analysts see a double-digit upside ahead and institutions like the stocks.
  • 5 stocks we like better than United Airlines.

Whenever investors think of the factors that can make a stock go up or become more popular in the market, they typically refer to the announcement of a mega investor like Warren Buffett taking a new interest in a stock. These events do undoubtedly make a stock's price soar as a reaction; however, there are other participants worth watching.

These corporate insiders know a company's value better than any analyst or investor can since they run it and understand what is happening daily. Knowing this, investors should watch for new corporate buyback announcements since they typically suggest the stock being bought is considered cheap or at least is expected to go on a run in the near future.

Stocks reporting increased corporate buybacks today include names like United Airlines Holdings Inc. NASDAQ: UAL, which represents the coming tailwinds in the transportation sector. Then there is the technology stock giant Microsoft Co. NASDAQ: MSFT, which gives investors another potential run higher if and when inflation makes its way into the economy. Finally, TechnipFMC NYSE: FTI provides support for systems in the energy sector.

United Airlines Stock Primed for Double-Digit Upside Potential

Management at United Airlines knows that the stock might be severely undervalued today, even though it already trades at a new 52-week high and has delivered an impressive rally of 125% over the past 12 months. The reasoning behind the buybacks, then, has to be linked to tomorrow's economic expectations.

United Airlines MarketRank™ Stock Analysis

Overall MarketRank™
73rd Percentile
Analyst Rating
Buy
Upside/Downside
1.6% Upside
Short Interest Level
Bearish
Dividend Strength
N/A
Environmental Score
-5.87
News Sentiment
0.76mentions of United Airlines in the last 14 days
Insider Trading
Selling Shares
Proj. Earnings Growth
14.22%
See Full Analysis

After approving up to $1.5 billion in stock buybacks, management is potentially betting on two things. First, oil prices have struggled to stay above a healthy uptrend, even though inflation pressures are building in some market dynamics today. Low oil prices help airlines keep their fuel costs low and expand their margins, also helping earnings.

This trend is what helped United Airlines deliver up to $3.33 in earnings per share (EPS) in its latest quarter, where the expectation was for only $3.1 in earnings. Analysts on Wall Street believe that United Airlines could keep this uptrend in earnings going, judging by some of the recent price targets set on the company today.

TD Cowen reiterated their Buy rating on United Airlines stock as of October 2024, this time placing a price target of up to $100 a share. To prove these analysts right, the stock would need to rally as much as 28.2% from where it trades today, not to mention a new high for the year.

Microsoft Stock Keeps Riding Technology, Sector Gains

This week, one of the technology sector’s biggest players reported strong earnings results: Alphabet Inc. NASDAQ: GOOGL. Its stock rose by over 11% in a single day on the good news, which could spill over to Microsoft stock on its earnings.

Microsoft MarketRank™ Stock Analysis

Overall MarketRank™
97th Percentile
Analyst Rating
Moderate Buy
Upside/Downside
16.5% Upside
Short Interest Level
Healthy
Dividend Strength
Weak
Environmental Score
-0.75
News Sentiment
1.03mentions of Microsoft in the last 14 days
Insider Trading
Selling Shares
Proj. Earnings Growth
14.31%
See Full Analysis

Management knows this, so they approved up to $60 billion worth of stock buybacks for the year. But that’s not the only reason they wanted to accumulate more of their own stock. During rising markets, such as those investors see today in the S&P 500, stocks that offer stability and certainty will trade at a premium.

Microsoft’s business is reliant on subscription revenue, which makes it very stable and predictable in most cycles. For this reason, the market is willing to pay a price-to-earnings (P/E) ratio of up to 36.6x today, which would seem expensive to most investors.

However, there’s always a reason for a stock to become Expensive, and that is because it will be more popular and preferred by most market participants, so valuations are only getting ahead of the inevitable. Analysts at Truist Financial seemed to have no problem with how Microsoft is valued and traded today.

With a recent price target set to $600 a share, these analysts think Microsoft stock could rally by as much as 37.6% from today’s prices, another factor for investors to keep in mind.

TechnipFMC Stock Set to Benefit from Buffett's View on Oil Markets

After Warren Buffett recently bought up to 29% of Occidental Petroleum Co. NYSE: OXY, markets became interested in oil stocks as a whole. Still, they’re not all made – or treated – equally. Those at the top of the value chain, those who support production and refining activity from lower in the chain, will likely get paid first.

TechnipFMC MarketRank™ Stock Analysis

Overall MarketRank™
85th Percentile
Analyst Rating
Buy
Upside/Downside
24.3% Upside
Short Interest Level
Healthy
Dividend Strength
Weak
Environmental Score
N/A
News Sentiment
0.27mentions of TechnipFMC in the last 14 days
Insider Trading
N/A
Proj. Earnings Growth
24.84%
See Full Analysis

This explains TechnipFMC management's hurried approval of up to $1 billion worth of stock buybacks, knowing that the company will see a higher valuation on every uptick oil prices make in the coming months. It would also explain the sudden price target boosts set by Wall Street analysts recently.

Those at Barclays joined Susquehanna and TD Cowen by placing a $37 a share valuation on TechnipFMC stock today. This would call for a massive upside of up to 41% from where the stock trades today. These weren’t the only participants excited about the stock’s potential future; institutional buyers also shared these bullish views.

Vestor Capital boosted its holdings in TechnipFMC stock by as much as 31.6% in late October 2024, bringing its net investment to $15.7 million today.

Should you invest $1,000 in United Airlines right now?

Before you consider United Airlines, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and United Airlines wasn't on the list.

While United Airlines currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

10 "Recession Proof" Stocks That Will Thrive in Any Market Cover

Which stocks are likely to thrive in today's challenging market? Click the link below and we'll send you MarketBeat's list of ten stocks that will drive in any economic environment.

Get This Free Report
Gabriel Osorio-Mazilli
About The Author

Gabriel Osorio-Mazilli

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Occidental Petroleum (OXY)
4.7091 of 5 stars
$47.13+3.9%1.87%12.27Hold$62.10
Alphabet (GOOGL)
3.6643 of 5 stars
$191.41+1.5%0.42%25.39Moderate Buy$206.69
Microsoft (MSFT)
4.8575 of 5 stars
$436.60-0.1%0.76%36.02Moderate Buy$508.46
TechnipFMC (FTI)
4.2283 of 5 stars
$28.89+0.9%0.69%19.01Buy$35.92
United Airlines (UAL)
3.6569 of 5 stars
$97.40+1.9%N/A11.75Buy$98.95
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

Recent Videos

From Landfills to Profits: Opal Fuels CEO Shares How the Company Turns Trash into Cash
The Real Reason Tesla Stock Is Soaring – and Why Tech Expert Says It Won’t Stop
Best ETFs for 2025: Growth, Stability, and AI-Driven Investing

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines