Insiders Like Nielsen Holdings plc (NLSN) — Should You?

The exact reason why investors have been taking up Nielsen Holdings plc (NYSE:NLSN) stock at a frenetic pace might seem like a bit of a head-scratcher at the moment, but that’s only if you are buying the stock for the wrong reasons. On 25 January, the shares accumulated 0.4 points or 1.58 percent at $25.68 with a light trade volume of 3.2 million shares. After opening the session at $25.76, the shares went as high as $26.045 and as low as $25.6, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $9.12 billion and now has 354.99 million shares outstanding. Nielsen Holdings plc (NLSN) stock has gained 16.15 percent of market value in 21 trading days.

NLSN stock has a trailing 3-year beta of 0.93, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.19 a share in the trailing twelve months. The stock’s value has surged 10.07 percent year to date (YTD) against a decline of -31.57 percent in 12 month’s time. The company’s shares still trade -34.57 percent away from its 1-year high of $39.25 and 25.09 percent up from 52-week low of $20.53. The average consensus rating on the company is 2.2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Nielsen Holdings plc (NLSN) will probably climb 9.85 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $34price as 12-month high target. This represents a whopping 32.4 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $29, which represents a return potential of 12.93 percent when compared to the closing price of the stock of $25.68 on Friday, January 25. The lowest price target for the stock is $24 — slightly more than -6.54 percent from NLSN’s current share price.

History has shown that shares in Nielsen Holdings plc have gone down on 21 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. Investors will get their next glimpse of NLSN’s Q4 earnings on February 28. Analysts are forecasting revenue to suffer decline of -5.9 percent to $1.66B in the fiscal fourth quarter, while earnings are seen soaring by nearly 34.78 percent to $0.31 per share. It earned $0.27 per share, better than the $0.25, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.6B, better than the $1.59B analysts expected. Earnings are estimated to increase by 7.4 percent this year, 23.57 percent next year and continue to increase by 8.76 percent annually for the next 5 years.

Let’s take a look at some insider activity at Nielsen Holdings plc (NYSE:NLSN) and see the pattern. The earliest insider trade took place on 12/03/2018. Charlton Jeffrey parted with a total of 6.34 thousand shares of company at average share price of $27.46. The total for the sales was set at $174.01 thousand. After this transaction, the SVP & Corporate Controller account balance stood at 19.94 thousand shares. The stock lost -6.48 percent since that insider sale. On 04/27/2018, Pozen Robert C, Director, sold 12.21 thousand shares at a price per share of $31.96. This removed 390.23 thousand shares from the insider’s fortune and the stock saw a -19.65 percent retreat in value since the news became public. This transaction left 211.8 thousand shares in the Director account.

On 03/08/2018, CFO Jackson Jamere performed a sale transaction worth $626.43 thousand. This sale at $32.97 each has eliminated 19 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -22.11 percent decrease since the transaction was reported. The insider now is left with 71.43 thousand shares remaining in the account. Jackson Jamere, who performs the CFO job, sold 16 thousand shares for $580.8 thousand. The disposal occurred on 12/14/2017 was priced at $36.3 per share. The share price plunged -29.26 percent since the reporting date. Jackson Jamere now left with a stake of 93.14 thousand NLSN stock worth $2.39 million after the insider selling.

The stock is currently hovering around the first support level of $25.51. Below this, the next support is placed in the zone of $25.33. Till the time, the NLSN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 55.93 on daily chart, which may remain a cause for concern. If the price breaks below $25.33 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $25.95 mark may result into a pull-back move towards $26.22 level.

Shares of Nielsen Holdings plc (NLSN) are trading at a P/E ratio of 30.12 times earnings reported for the past 12 months. The industry NLSN operates in has an average P/E of 33.04. Its P/E ratio went as low as 30.26X and as high as 46.11 over the 5-year span.Further, it is sporting a 1.38 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.49. 57.2 percent is the gross profit margin for Nielsen Holdings plc and operating margin sits at 15.9 percent. Along with this, the net profit margin is 4.9 percent.