WDFC

WD-40 ($WDFC) Executive Buying Spree at $200 Level Signals Major Opportunity

10/30/2025 00:45

WD-40 Company ($WDFC), founded in 1953, is a global specialty chemical company that manufactures and distributes maintenance and homecare products worldwide, including its flagship WD-40 Multi-Use Product, 3-IN-ONE, and GT85. The company distributes through hardware stores, automotive parts outlets, mass retail centers, and other channels globally, employing approximately 714 people. Investors should focus on the unprecedented insider buying surge that occurred in late October 2025. On October 27, Director Daniel Carter purchased 1,000 shares at an average price of $199.37, followed by coordinated purchases on October 28 by CFO Sara Hyzer, President Steven Brass, and Officer Phenix Kiamilev. All purchases occurred around the $200 level, suggesting management views the current stock price as significantly undervalued. Analyzing the current price level, $WDFC declined approximately 20% from its July 2024 high of $267 to September 2025 low of $212. Year-to-date, shares are down over 21%, with five-year cumulative returns at -24%. However, insider purchases around $199-200 occurred near the recent 12-month lows, which is unlikely to be coincidental. The company's fundamentals tell a completely different story from the stock's performance. Fiscal 2025 results (ending August) showed revenue growth of 5% to $620 million, while net income surged 31% to $91 million. Earnings per share improved dramatically from $5.11 to $6.69. Most impressively, gross margin expanded from 53.4% to 55.1%, demonstrating both pricing power and operational efficiency. Regionally, Asia-Pacific drove growth with a remarkable 28% increase, while EIMEA (Europe, India, Middle East, Africa) grew 7%. However, Americas declined 2%, representing a notable weakness. Despite this, the company achieved an outstanding ROE of 36.49%, among the best in the industry. Recent quarterly performance was even more impressive. Q1 fiscal 2026 (ending November) EPS of $1.57 nearly doubled consensus estimates of $0.82. While revenue growth was modest at 1.2%, profitability improvements were substantial. Examining insider trading patterns reveals telling details. In October-November 2024, Director William B. Noble sold approximately $495,000 worth of shares at prices between $256-289. Nearly a year later, multiple executives simultaneously purchased shares around $200. This clearly indicates management believes shares have fallen below fair value. Investors should monitor positive signals including additional insider purchases, Q2 guidance upgrades, and continued Asia-Pacific growth momentum. Warning signs include persistent Americas sales declines, valuation expansion beyond the current 28.6x P/E, and broader macroeconomic deterioration. Scenario analysis suggests an optimistic case where insider judgment proves correct, potentially driving shares back above $250—representing 25%+ upside potential. The most likely base case involves gradual appreciation supported by solid fundamentals. Risk scenarios include economic slowdown pressuring premium valuations. Current analyst consensus supports a 'buy' rating with an average target price of $296, implying approximately 24% upside. Management guided fiscal 2026 revenue of $630-655 million with gross margins of 55.5-56.5%. In conclusion, $WDFC presents an intriguing investment opportunity combining strong insider buying signals with solid earnings momentum. However, premium valuation and regional growth concerns warrant careful consideration.