New Trade for December 19th, 2023

Darling Ingredients (NYSE:DAR): A Turnaround Story in the Making?

Darling Ingredients, a leader in renewable energy, particularly in renewable diesel and biomethane, has recently caught the attention of market insiders. Despite being named one of America’s Most Responsible Companies of 2024 by Newsweek and Statista, DAR stock has experienced a significant downturn in 2023, dropping 19% and trading at $49.99, which is 65% below the analysts’ consensus price target of $83.60.

The primary reason behind this decline appears to be lackluster earnings, with the company missing top and bottom-line expectations several times in 2023. Additionally, year-over-year revenue and earnings have shown a decrease in the most recent quarter. However, the insider activity tells a different story.

In the past three months, five different insiders have made six purchases of DAR stock. This insider buying indicates a belief among those closest to the company that the stock is undervalued. While there hasn’t been a single news item driving shares higher, the market sentiment towards Darling Ingredients seems to be shifting. The stock has risen 18% in the last month, coinciding with a 5% drop in short interest.

The buy case for DAR stock hinges on this insider confidence and the recent uptick in its market performance. While past earnings have been disappointing, the insider buying activity suggests a belief in the company’s long-term value and potential for recovery. Investors should consider this insider confidence alongside other metrics before deciding on their position in DAR stock. Darling Ingredients presents an interesting case for investors. The discrepancy between insider confidence and market performance, coupled with the company’s strong position in renewable energy and sustainability, makes DAR a stock to watch closely. As the market continues to evolve, Darling Ingredients could very well be a turnaround story in the making.

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