Insider Activity Report: Illinois Tool Works (ITW)

David Smith, a director at Illinois Tool Works (ITW), recently bought 1,000 shares. The buy increased his position by less than 1 percent, and came to a total cost of $241,790.

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  • The director was also the most recent buyer of shares with a 1,390 share buy last September, at a cost of just over $308,000. Otherwise, three company insiders have been sellers this year, all coming from the exercise of stock options.

    Overall, Illinois Tool Works insiders own 0.3 percent of shares.

    The specialty tool company is up about 10 percent over the last year, outperforming the S&P 500 by 5 points. Revenues are up a scant 0.5 percent, and earnings are up just 6 percent.

    The good news? Profit margins are nearly 20 percent, a high level for any company that manufactures physical goods. And ITW is a dividend growth play, with a long history of increasing its payout over time.

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  • Action to take: At current prices, shares yield about 2.3 percent, and the dividend was raised 5 percent over the past year. Long-term investors looking for a solid dividend growth company could buy shares now, and add to that position on any pullback.

    For traders, shares are trending higher. The March 2024 $260 calls, last going for about $5.00, could see mid-double-digit returns on a further rally in the months ahead.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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