Plexus Corp (PLXS): When Do Insider Sales Signal Opportunity?

Investors often treat insider sales as a red flag, but what happens when those transactions occur alongside record earnings, robust financial metrics, and strategic growth? For Plexus Corp (PLXS), the answer may lie in parsing the nuance between personal financial planning and corporate confidence.

The Insider Sell-Off: A Cause for Concern or a Distraction?

In 2025, Plexus CEO Todd Kelsey has sold nearly 15,000 shares across multiple transactions, most recently on May 23 and 27, reducing his stake to 76,714 shares. CFO Jermain John also sold 4,328 shares in May. While such activity typically raises eyebrows, the timing and context here are critical. These sales occurred after the company reported Q2 EPS of $1.66—beating estimates by 7.79%—and reaffirmed a 6% revenue growth outlook for the next quarter.

The Financial Foundation: A 7/9 Piotroski Score and More

Plexus's financial health is undeniable. Despite a minor revenue miss ($980.17M vs. $981.4M), the company delivered a Piotroski F-Score of 7/9, signaling strong fundamentals. Key drivers include:
- Positive net income and operating cash flow: $39.07M and $36.7M, respectively.
- Reduced leverage: Long-term debt dropped 1.35% year-over-year.
- Improved margins: Gross margin expanded to 10% from 9.1%.
- Share buybacks: A $12.2M repurchase under a $50M authorization, signaling confidence in valuation.

The only weak spots—a slight dip in the asset/liability growth ratio and incomplete ROA data—do not outweigh the positives.

Strategic Momentum: Automation, AI, and Global Expansion

Plexus is betting on the future. The company is pouring resources into AI-driven automation, advanced robotics, and a new $250M facility in Malaysia to capitalize on rising demand for electronics manufacturing services. These investments align with its goal of $100M in annual free cash flow, supported by $16.5M in Q2 alone.

Analysts at Needham recently raised their price target to $145 (from $135) while maintaining a “Buy” rating, citing Plexus's “best-in-class” operational execution and diversified client base.

Why the CEO Sold: Personal Finance, Not Exit Strategy

Insider selling does not inherently signal doubt. Kelsey's sales, spread across months and at varying prices, suggest disciplined wealth management rather than a sudden loss of faith. His remaining 76,714 shares—still a substantial holding—reinforce his long-term commitment. Meanwhile, institutional investors hold 68% of the float, with no major redemptions reported.

The Investment Case: Buy the Dip

Plexus's stock trades at 26x forward earnings—a premium to peers, but justified by its growth trajectory and defensive cash flow. With a Piotroski score in the top quartile of its sector and strategic initiatives gaining steam, the recent dip post-insider sales presents a rare entry point.

Actionable Takeaway:
- Buy PLXS at current levels, targeting $150 within 12 months.
- Watch for: Q3 revenue growth, Malaysia facility progress, and free cash flow updates.

In a market obsessed with short-term noise, Plexus reminds us that fundamentals—when paired with visionary execution—can silence even the loudest skeptics. This is a stock to own for the next decade, not the next quarter.