One of the most bullish insider transaction patterns is ‘cluster buying’. This is where three or more insiders at the same organization have purchased company stock within a short period of time.

In this report, we are going to highlight a cluster buying pattern at NextEra Energy Inc (NEE:US). NextEra Energy is an American clean energy company. Operating through a number of subsidiaries including Florida Power & Light Company and NextEra Energy Resources, it provides renewable energy to millions of customers across the US. The company is listed on the New York Stock Exchange and currently has a market cap of approximately $150.26 billion.

Insider Buying at NextEra Energy

Our data shows that between February 6 and February 9, Five insiders at NextEra Energy purchased company stock. Those who bought shares were:

CFO Kirk Crews (2,672 shares @ 74.86 per share)
Board member John Stall (4,000 shares @ $74.89 per share)
Board member Amy Lane (1,000 shares @ $74.86 per share)
Board member James Camaren (2,000 shares @ $73.49 shares)
Board member David Porges (7,000 shares @73.27 shares)

Combined, the insiders invested around $1.22 million in company stock.

Cluster Buying

There are a few things that stand out here.

For a start, the CFO has made a substantial purchase. CFOs have deep insight into their firms’ financials and some studies have found that these insiders earn higher profits following their purchases of company shares than CEOs do.

Secondly, Mr. Stall has increased the size of his position substantially (from 3,517 shares to 7,517 shares). Mr. Stall previously held numerous nuclear leadership roles at NextEra, so he is likely to know the company very well.

Third, Ms. Lane has a background in investment management. Previously, she was Managing Director and Group Leader of the Global Retailing Investment Banking Group of Merrill Lynch & Co. So, she is likely to have a good understanding of the company’s investment potential.

Dividend Growth Potential

NextEra Energy recently posted a solid set of Q4 results thanks to robust demand for alternative energy.

For the quarter, revenue rose 22% year on year to $6.16 billion. Adjusted earnings per share (EPS) came in at $0.51 versus $0.41 a year earlier. Analysts had been expecting adjusted EPS of $0.49.

"NextEra Energy was successful in executing our 2022 initiatives, ending the year with excellent financial and operational results," commented Chairman, President, and CEO John Ketchum.

Looking ahead, the company said that it is well positioned thanks to the Inflation Reduction Act, and reaffirmed its outlook for 2023 and 2025. It noted that it expects to grow its dividends at a rate of roughly 10% rate per year through at least 2024.

In light of this anticipated dividend growth, we see the insider buying here as a bullish signal.

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