A Study On A Growth And Income Insider Buys

Stocks got kicked to the head last week like Alexander Volkanovski, KOed. Much like the Australian challenger, insiders took the 10 count with the markets getting whacked. Only one company raised its hand as bears threw kicks and punches, sending the indexes to the canvas.

A pair of insiders at John Wiley & Sons, Inc. (WLY) combined to buy 26,550 shares for a total investment of $801,228. (1) Interim President and Chief Executive Officer (CEO) Matther Kissner acquired 16,500 at $30.33 for a little more than a half-million dollars and Director David Dobson purchased 10,162 shares at $29.99 for touch more than $300.000. (1)

CEO Kissner’s trade is the more interesting of the two. Prior to last week’s action, the interim boss sold twice in 2021. First in January at $46.65 per share and then again in April at $55.80, banking close to $1.3 million. Last week was his maiden buy. We call that a change of heart trade i.e. when a pure seller turns into a buyer for the first time. We also like it when multiple insiders decide to jump in at the same time.

John Wiley & Sons operates as a research and education company worldwide. The company operates through three segments: Research, Academic, and Talent. The company offers scientific, technical, medical, and scholarly journals, as well as related content and services to learned societies, individual researchers, other professionals, and academic, corporate, and government libraries.

Both made their moves as the publisher set its 52-week low of $28.83. Shares have been under pressure because sales and earnings are expected to decline. Last year, WLY earned $3.84 per share (EPS) with sales of $2.02 billion. This year, Wall Street forecasts EPS of $2.25 with revenue dropping more than 16 percent to $1.69 billion. (3)

During its most recent earnings report, management reaffirmed its fiscal 2024 outlook (current year), which aligns with Wall Street’s forecasts. The bottom line is looking better, potentially, for fiscal 2025 (next year) as estimates are at $3 per despite the top line slated to slip another 3 percent.

Although sales could remain stagnant, profits could pop as management told shareholders, “The Company expects material margin improvement in Fiscal 2025 and Fiscal 2026.” (4) While it might take time for WLY’s stock price to reflect improvements in the Income Statement, shareholders will receive a solid dividend yield of 4.55 percent annually ($1.40 per share).

Based on the last three decades, the dividend could head higher. The Company raised its dividend for the 30th consecutive year in June. For the quarter, Wiley allocated $19 million toward dividends and $10 million toward repurchasing 301,000 shares at an average cost per share of $33.25. This compares to 212,000 shares repurchased in the prior year period.

OVERALL: John Wiley & Sons, Inc. (WLY) could be a solid growth and income investment for patient investors with a time horizon into 2024, maybe 2025. Wall Street has a one-year price target of $45.00 (plus a $1.40 dividend) whereas the stock trades at $31.07 as of this writing. With a five-year beta of 0.94, WLY shares are considered slightly less volatile than the S&P 500 with a beta of 1.

Rich Meyers


1 – https://www.secform4.com/insider-trading/107140.htm

2 – https://www.secform4.com/insider-trading/1204532.htm

3 – https://finance.yahoo.com/quote/WLY/analysis?p=WLY

4 – https://newsroom.wiley.com/press-releases/press-release-details/2023/Wiley-Reports-First-Quarter-2024-Results/default.aspx

5 – https://finance.yahoo.com/quote/WLY/key-statistics?p=WLY