Sysco Corporation (SYY) Insider Trading Is Uncovering Many Things

If you can handle volatility, Sysco Corporation (NYSE:SYY) is the stock to watch now. The stock closed higher on 12 February. The shares accumulated 0.65 points or 0.98 percent at $66.94 with a heavy trade volume of 3.92 million shares. After opening the session at $66.29, the shares went as high as $66.99 and as low as $66.19, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $34.7 billion and now has 517.87 million shares outstanding. Sysco Corporation (SYY) stock has gained 6.19 percent of market value in 21 trading days.

SYY stock has a trailing 3-year beta of 0.53, 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 $2.8 a share in the trailing twelve months. The stock’s value has surged 6.83 percent year to date (YTD) against a rise of 14.76 percent in 12 month’s time. The company’s shares still trade -11.9 percent away from its 1-year high of $75.98 and 15.57 percent up from 52-week low of $57.92. The average consensus rating on the company is 2.5, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Sysco Corporation (SYY) will probably climb 4.68 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $82 price as 12-month high target. This represents a whopping 22.5 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $72, which represents a return potential of 7.56 percent when compared to the closing price of the stock of $66.94 on Tuesday, February 12. The lowest price target for the stock is $54 — slightly more than -19.33 percent from SYY’s current share price.

History has shown that shares in Sysco Corporation have gone down on 22 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. Investors will get their next glimpse of SYY’s Q3 earnings on May 13. Analysts are forecasting revenue to climb 2.6 percent to $14.8B in the fiscal third quarter, while earnings are seen soaring by nearly 10.61 percent to $0.73 per share. It earned $0.91 per share, worse than the $0.92, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $14.8B, in line with the $14.8B analysts expected. Earnings are estimated to increase by 23.7 percent this year, 10.19 percent next year and continue to increase by 11.44 percent annually for the next 5 years.

Let’s take a look at some insider activity at Sysco Corporation (NYSE:SYY) and see the pattern. The earliest insider trade took place on 02/04/2019. Charlton Robert S parted with a total of 22.32 thousand shares of company at average share price of $65.83. The total for the sales was set at $1.47 million. After this transaction, the Executive Vice President account balance stood at 50.3 thousand shares. The stock grew 1.67 percent since that insider sale. On 01/31/2019, Libby Russell T., Executive Vice President, sold 60.16 thousand shares at a price per share of $63.4. This removed 3.81 million shares from the insider’s fortune and the stock saw a 5.57 percent rally in value since the news became public. This transaction left 59.6 thousand shares in the Executive Vice President account.

On 11/28/2018, Director Trian Fund Management, L.P. performed a sale transaction worth $101.38 million. This sale at $66.5 each has eliminated 1.52 million shares from the insider’s portfolio position. Meanwhile, shares have recorded 0.65 percent increase since the transaction was reported. The insider now is left with 28.3 million shares remaining in the account. Trian Fund Management, L.P., who performs the Director job, sold 1.52 million shares for $101.38 million. The disposal occurred on 11/28/2018 was priced at $66.5 per share. The share price soared 0.65 percent since the reporting date. Trian Fund Management, L.P. now left with a stake of 28.3 million SYY stock worth $1894.15 million after the insider selling.

The stock is currently hovering around the first support level of $66.42. Below this, the next support is placed in the zone of $65.91. Till the time, the SYY stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 65.62 on daily chart, which may remain a cause for concern. If the price breaks below $65.91 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $67.22 mark may result into a pull-back move towards $67.51 level.

Shares of Sysco Corporation (SYY) are trading at a P/E ratio of 23.65 times earnings reported for the past 12 months. The industry SYY operates in has an average P/E of 40.27. Its P/E ratio went as low as 23.98X and as high as 33.35 over the 5-year span.Further, it is sporting a 0.58 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.29. 18.9 percent is the gross profit margin for Sysco Corporation and operating margin sits at 3.8 percent. Along with this, the net profit margin is 2.5 percent.