Effective though controversial big data analytics firm Palantir Technologies (NYSE:PLTR) has always made a compelling case for its supporters. Undoubtedly, as the world increasingly rises in complexity, the innovations underlying PLTR stock become even more relevant.
Seemingly, you have a viable and long-term narrative, yet one factor has always been distracting.
According to insider transaction data from Gurufocus.com, the source of some of the most concentrated selling comes from the executives themselves, as in those closest to the business. Now, let’s be clear. Insider selling doesn’t necessarily mean that PLTR stock is a sell. This is capitalism: you take risks to get rich. And the richer the rich get, the more people downwind benefit (I guess).
So, it’s very possible that Palantir execs need more helicopters and yachts. Again, I’m not criticizing. Those purchases invariably help the global economy because someone has to build and maintain such vehicles. It’s capitalism. But if you’re really thinking like a capitalist and Palantir is truly a game changer, why not eschew the helicopters and yachts now and load up on PLTR stock?
I mean, if PLTR stock is going to the moon as some of its ardent supporters claim, wouldn’t it be better to hold shares or even buy them? I’ve been looking through the transaction list that Gurufocus provided and I’m not seeing any insider buys.
And that’s why it’s distracting. I understand why many folks are excited about the business. But my goodness, you’d like to see at least one or two execs – as I said, those closest to the company – take a shot at PLTR stock.
Nevertheless, since around the middle of May of this year, Palantir has been on the move, appearing to have printed a positive inflection. Is this the opportunity to get in?
PLTR Stock Is a Possible Long Play on Trump’s Return
According to my InvestorPlace colleague Tezcan Gecgil, PLTR stock is in a consolidation pattern, which is generally accurate. While it’s been on the move since May, it’s also been gyrating. Fortunately for the optimists, it’s also printing a series of higher lows.
At the same time, she mentions that it’s a long-term buy and I can appreciate why. As we’ve seen with various headlines, just because the world is working through the damage of the novel coronavirus pandemic doesn’t mean that bad actors with very ill intent have taken a vacation from their nefarious agendas. In addition, the U.S. must handle an influx of undocumented border crossings.
I’m not going to dive into the politics of this issue because they’re incredibly caustic. So, let’s look at pure numbers. According to the Pew Research Center, “Migrant encounters at U.S.-Mexico border are at a 21-year high.” If you doubt the veracity of that claim, you can look up the numbers yourself from the primary source, the U.S. Customs and Border Protection agency.
To be fair, the Cato Institute reported that “Zero people have been killed or injured in attacks on U.S. soil committed by terrorists who illegally crossed the Southwest border.”
Here’s where some politics has to come in and how it benefits PLTR stock. While it may be true that zero people have died from terrorism “sourced” from illegal border crossings, two facts remain: terrorists have crossed our borders and Americans have a vested interest in keeping that zero-fatality record.
Ultimately, as controversial as some of Palantir’s data analytics solutions are regarding undocumented migrants, they might be necessary now. And who has the backbone to implement such solutions?
You guessed it. Former President Donald J. Trump.
So Buy It?
Assuming that Trump doesn’t end up in the big house, the White House is certainly a real possibility. When I was writing at frequency about Palantir, President Joe Biden was doing an OK job. Since the Afghanistan disaster, however, Biden and the Democrats appear to be fighting for their political lives.
Therefore, it shouldn’t surprise anyone that Trump emerges victorious in 2024 under the thesis that while he may not be the president America wants, he’s the president America needs.
It might be the same situation for Palantir. It’s not the data analytics solution people want but it’s possibly a necessary evil. Just be prepared for downside risk since there’s another fact to always consider: the insider selling remains ongoing.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.