Element Fleet Management Corp T.EFN.PR.E

Ink Research 2

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Morning Report: Insiders buy the dip at Element Fleet Management 

March 14, 2023

Element Fleet Management (EFN) is up 46.8% over the past year. It set a 52-week high of $20.21 at the open on March 7th following the release of 2022 results after the close on March 6th, but investors subsequently took profits. The stock closed at $18.00 on Monday.

Element reported 2022 net revenue of $1.1 billion, up 16.2% from 2021. Adjusted operating income came in at $624.5 million, up from $522.6 million the year before. CEO Jay Forbes remarked that 2022 was the "most successful year in the Company's history" as headwinds from both the pandemic and vehicle shortages abated. Management reaffirmed its 2023 guidance (previously issued in November) of net revenue from $1.14 to $1.17 billion and adjusted operating income from $615 to $645 million. Element plans to return between 25% and 35% of its trailing 12-months free cash flow to shareholders in the form of its dividend. Element reported free cash flow of $1.35 per share in 2022 (up from $1.05 in 2021), and it expects that to grow to between $1.45 and $1.50 in 2023. Element currently has a quarterly dividend of $0.10 per share which works out to an indicated dividend yield of 2.2%.

What has caught our attention is that insiders have been net buyers of $3.1 million worth of shares through a combination of public market purchases and options exercises since March 9th.