Insiders have been buying at Intel, Fox

IN the past few weeks, insiders have been buying their own shares at Intel Corp. (INTC) and Fox Corp. (FOX).

Patrick Gelsinger, chief executive officer at Intel, spent just over half a million dollars to buy shares in August, bringing his stake to a bit over $7 million.

Gelsinger, at age 32, became the youngest vice president in Intel’s history. In 2001, he was named chief technology officer. He left Intel in 2009 to become president of EMC and later CEO of Vmware. He returned to Intel as CEO in 2021.

At the recent price of less than $32, Intel shares look extremely good to me. They sell for less than seven times earnings, in a market where the average multiple is about 24. In my opinion, Intel shares have been punished too harshly for the company’s sins.

Those sins include a reliance on sales of personal computers, which are declining, as opposed to sales of mobile devices, which are increasing.

Investors are underestimating Intel’s strengths, I believe. It is the world’s largest manufacturer of logic chips (microprocessors). It has posted a profit in each of the past 30 years — yes, even including recession-scarred 2008 and 2020.

Fox

At Fox Corp., the parent of Fox News, insiders have both bought and sold shares this year.

CEO Lachlan Murdoch bought shares in August, bringing his total holding to about $26 million worth.

Lachlan is the son of Rupert Murdoch, who remains Fox’s chairman. Rupert sold most of his Fox stake last year. The Murdochs are also key figures in News Corp. (NWSA), which owns a media empire including the Wall Street Journal, the London Times, Harper Collins, and many others.

Personally, I don’t like the political slant of Fox News, but I like the stock. It’s selling for 16 times recent earnings and nine times the earnings analysts expect in the fiscal year that started in July.

Fox earned $2.11 a share in the fiscal year that ended in June. For the fiscal year now in progress, analysts expect $3.51 a share — a nice jump.

The record

A year ago, I recommended two stocks. Terminex Global Holdings Inc. (TMX) gained 2.5 percent and Westlake chemical returned 16.7 percent. I also noted insider selling at Trade Desk Inc. (TTD). It’s down 6.1 percent.

Since 1999, my recommendations based on insider buying have beaten the S&P 500 by two percentage points per year. The stocks where I noted insider sales have trailed the index by 1.4 percentage points.

Stocks that I said to avoid, even though insiders had bought, have trailed the index by 24 percentage points per year. Stocks where I noted buying, but made no recommendation (or an ambiguous comment) have beaten the index by 19 percentage points.