KeyBank Trimmed 13,406 Lincoln Electric Shares as Insiders Sold Too

KeyBank National Association OH cut its Lincoln Electric Holdings (NASDAQ:LECO) stake by 2.5% in the third quarter, selling 13,406 shares, according to its most recent 13F filing with the Securities and Exchange Commission. The bank held 518,602 shares at quarter-end — roughly 0.96% of the company, worth $137,212,000.

That single trim does not tell the whole story. The filing arrives in a quarter when several institutions moved in the opposite direction.

Who bought, and how much?

Second-quarter filings show five institutions establishing new positions:

• BlackRock Inc. acquired a stake worth $1,431,181,000
• HSBC Holdings PLC built a position valued at $52,700,000
• Algebris UK Ltd. bought in at $44,811,000
• Caisse de dépôt et placement du Québec committed $26,148,000
• Advisors Capital Management LLC added $21,914,000

Institutional investors and hedge funds together own 79.61% of Lincoln Electric's stock. Takeaway: one bank's 2.5% trim sits inside a broader pattern of accumulation.

What did the earnings report show?

Lincoln Electric posted quarterly results on Tuesday, October 27. Earnings per share came in at $2.98, beating the analyst consensus of $2.81 by $0.17. Revenue reached $1.22 billion against a consensus estimate of $1.17 billion.

The comparison with the prior year is the sharper fact. Revenue rose 15.1% year over year, and EPS climbed from $2.47. Net margin stood at 12.40%; return on equity reached 40.06%. Analysts forecast full-year EPS of $11.38.

The numbers are strong. What the release does not say is how much of that margin rests on a demand cycle that has already lifted the shares near their highs.

What changed with the dividend?

The board raised the quarterly dividend to $0.87 per share from $0.79, payable Friday, January 15 to stockholders of record on Thursday, December 31 — which is also the ex-dividend date. The new dividend annualizes to $3.48, a yield of 1.2% at recent prices. The payout ratio sits at 30.30%, which leaves room for further increases — provided earnings hold.

How did analysts react?

Five reports followed the earnings release:

• Barclays raised its target from $300.00 to $350.00, rating the stock "overweight" (October 29)
• Stifel Nicolaus lifted its objective from $271.00 to $290.00 with a "hold" rating (October 28)
• Robert W. Baird moved from $317.00 to $322.00, "outperform" (October 28)
• Wall Street Zen upgraded from "hold" to "buy" (October 31)
• UBS Group raised its target from $340.00 to $360.00, "buy" (October 28)

Six analysts rate the stock Buy and four rate it Hold. MarketBeat data show an average rating of "Moderate Buy" and a consensus price target of $319.11.

What did insiders do?

CEO Steven B. Hedlund sold 14,371 shares on Friday, October 30, at an average price of $281.95 — a total of $4,051,903.45. The sale cut his ownership by 18.46%; he retained 63,483 shares valued at $17,899,031.85. The transaction was disclosed in an SEC filing. Insiders own 1.68% of the company.

A chief executive selling an 18.46% slice of his holding days after an earnings beat is a fact worth weighing against every price-target increase on the list above.

Where does the stock trade now?

LECO opened at $284.42 on Wednesday, flat on the day. The market capitalization is $15.40 billion. The stock carries a P/E of 27.27, a price-to-earnings-growth ratio of 1.67 and a beta of 1.19. It has traded between a one-year low of $216.22 and a high of $310.00. The fifty-day moving average is $267.47; the 200-day average is $266.72. The balance sheet shows a debt-to-equity ratio of 0.74, a current ratio of 1.91 and a quick ratio of 1.18.

Lincoln Electric, founded in 1895 by John C. Lincoln, manufactures arc-welding equipment, plasma and oxyfuel cutting systems, robotic welding automation, and brazing and soldering products for manufacturing, infrastructure, energy and transportation customers worldwide.

The stock sits above both moving averages, insiders are selling, and analysts keep raising targets — rarely do all three point the same way.