Insiders are increasingly investing in three Dividend Aristocrat stocks with distressed valuations, signaling potential for a turnaround. These companies possess strong fundamentals, with cash flows that adequately cover dividends. Insider trading activity serves as a reliable indicator of management's expectations for future performance. Research indicates that following insider activity can lead to market-beating outcomes, with a 2024 study showing insiders outperforming the market by up to 20%. This trend suggests a strong likelihood of future stock performance improvement for companies with solid business foundations.
UnitedHealth (NYSE:UNH) is a Dividend Aristocrat trading at 2018 prices after a slew of unfortunate events that caused it to plunge. The December assassination of CEO Brian Thompson rattled investors and triggered an internal succession scramble, followed immediately by a rare 1.2% earnings miss in Q1, a guidance withdrawal, and the group's CEO resigning.
Multiple studies have shown that following insider portfolios is a good way to beat the market. A 2024 study by Michigan Ross says insiders can beat the market by up to 20%. According to BBAE, insiders have also historically outperformed by 11% per year vs. the S&P 500's average.
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