Insiders Are Loading Up: 3 Key Stock Picks for Investors

Key Points

• To start the new year with a strong gain, investors can align their portfolios where the bigger firms are buying, knowing that the fundamentals check out.
• Wall Street analysts agree, seeing a double-digit upside ahead for these names.
• The price action and relative valuations in these stocks offer unmissable opportunities.

The new year is just getting started, and that means investors need to get off on the right footing for the first quarter so that they can have the rest of the year as an open field to take on more positions and ideas, with not only the confidence but the financial room they would have made for themselves after rocking the start of the year. To get this done, investors should align themselves with what some Wall Street firms are doing right now.

This is where today’s list of insider buying activity comes into play, as investors can reverse engineer the reasoning behind these bigger firms buying into a stock and, if justifiable enough, get some for themselves. This might ensure that their portfolios kick off the new year with a bang, leaving plenty of room to keep up the momentum for the remainder of the year.

Stocks like Nike Inc. NYSE: NKE, FedEx Co. NYSE: FDX, and even Occidental Petroleum Co. NYSE: OXY have all caught the attention of institutional buyers and investors recently. It looks like Wall Street analysts are aligned with the fundamental stories behind these companies, which are strong enough to justify double-digit upside in the coming months.

Nike Stock’s Dip: A Rare Opportunity

It isn’t often that blue-chip stocks like Nike come to trade at such low levels, even if the stock is in the highly cyclical consumer discretionary sector. After a few controversial quarters, showing some weakness in their Chinese branches, Nike stock has sold off to a low of 68% of its 52-week high.

The slowing overseas numbers may have partly justified this discount. Still, at this point, most in the market can agree that it has been largely overdone. Leading this school of thought is billionaire value investor Bill Ackman, who has accumulated a stake of up to 3 million shares in Nike stock.

With a multi-million dollar position, Ackman is betting that the company’s international exposure and brand recognition will not only help the stock get back on its feet and command a premium for its presence but also mitigate most—if not all—risks associated with a potential downturn in the economy.

Wall Street analysts, particularly those from Robert W. Baird, decided to share the optimism for Nike stock as of December 2024. With an outperformed rating on the stock, their new $105 a share price target shows a net upside potential of as much as 43.2% from where the stock trades today.

Business Activity, Delivered by FedEx Stock

Though FedEx stock doesn’t offer as much discount as Nike, at 87% of its 52-week high, it still carries enough upside to attract insider buying activity lately. Leading the pack in buying, those from State Street decided to accumulate up to $2.6 billion worth of FedEx stock, or 3.8% ownership in the company.

Knowing that, as the Federal Reserve (the Fed) cuts interest rates, business activity will likely begin to pick up again. Amongst the many industries that can benefit from this shift, the transportation sector is at the heart of most businesses and their needs when it comes to transportation. This is where the appeal in FedEx stock comes in.

Wall Street analysts would agree with this theme, as those from J.P. Morgan Chase decided to reiterate their overweight rating on the stock, this time keeping a $370 valuation on it. To prove these new targets right, FedEx stock would have to stage a rally of up to 35% from today’s prices, justifying the recent purchases by these institutions.

Warren Buffett Is Back at It Again With OXY

Following the increased business activity theme, investors shouldn’t be surprised to see renewed optimism around the energy sector. This time, however, the confirmation couldn’t be stronger. Warren Buffett has decided to buy up to 29% of Occidental Petroleum stock, and these metrics would back his decision.

First, the stock trades at a significant discount on a price-to-book (P/B) basis today. Compared to the energy sector’s average 3.6x valuation, Occidental Petroleum stock’s 2.0x multiple gives Buffett just the sort of discount he’s famous for going after and one that investors shouldn’t ignore today.

As the stock now sits at 71% of its 52-week high, price targets become more valuable than ever before; for example, Mizuho analysts now see a fair valuation for the stock at a high of $70 a share. This view would dare the stock to rally by as much as 38.6% from where it trades today, another home run for investors to score this year.