24/7 Insights

• As earnings-reporting season winds down, more insiders are free to buy and sell their own stocks.
• Insiders have shown their faith in fracking, recreational boating, and a buyout candidate.

With the earnings-reporting season winding down, the windows for making insider purchases are opening up. In the past week, insiders have been scooping up shares of a fracking services company, as well as a couple of health care companies and a recreational boat maker. Let’s take a look.

Is Insider Buying Important?

A well-known adage reminds us that corporate insiders and 10% owners really only buy shares of a company because they believe the stock price will rise and they want to profit from it. Thus, insider buying can be an encouraging signal for potential investors. This is all the more so during times of uncertainty in the markets, and even when markets are near all-time highs.

Remember that while earnings-reporting season was in full swing, many insiders were prohibited from buying or selling shares. Below are some of the more notable insider purchases that were reported in the past week, starting with the largest.

Profrac

• Buyer(s): Executive Chair Matthew Wilks and 10% owner THRC Holdings
• Total shares: almost 1.9 million
• Price per share: $8.30 to $22.08
• Total cost: around $21.5 million

Texas-based hydraulic fracturing services company Profrac Holding Corp. (NASDAQ: ACDC) named a new chief financial officer recently. It also posted results earlier in the month that were in line with expectations. The share price is about 13% higher since then, and the stock is up more than 9% year to date. The consensus price target of $11.25 is less than the 52-week high of $14.32, but it represents more than 21% upside for the shares in the next 12 months. Yet, only three of seven analysts who cover the stock recommend buying shares. Note that Wilks bought 88,500 shares, bringing his stake to over 1.4 million shares.

Privia Health Group

• Buyer(s): two directors
• Total shares: more than 562,400
• Price per share: $16.17 to $16.43
• Total cost: over $9.1 million

Though Privia Health Group Inc. (NASDAQ: PRVA) recently posted mixed first-quarter earnings, some analysts were pleased enough to raise their target prices. The health care services provider had a CEO transition last year and expanded the size of its board. The shares are down almost 37% in the past year and hit an all-time low of $15.92 this past week. However, the stock was last seen changing hands for more than the purchase price range above. The mean price target is $26.03, which would be a gain of almost 52% in the next 12 months. The consensus recommendation is to buy the shares.

Mastercraft Boat

• Buyer(s): 10% owner Coliseum Capital Management
• Total shares: about 347,800
• Price per share: $20.54 to $21.25
• Total cost: almost $7.3 million

After picking up more than $7 million worth of Mastercraft Boat Holdings Inc. (NASDAQ: MCFT) shares earlier in the month, this beneficial owner returned to the buy window. The Tennessee-based recreational boat maker recently posted fiscal third-quarter results that surpassed projections. And a new chief executive took up the reins back in March. Year to date, the stock is down over 7%, despite rising about 2% in the past week. The $22.50 consensus price target is less than the 52-week high, but it is about 9% higher than the current share price. Analysts on average recommend buying shares.

Allogene Therapeutics

• Buyer(s): a director
• Total shares: over 1.7 million
• Price per share: $2.90
• Total cost: about $5.0 million

This buyer took advantage of an offering of Allogene Therapeutics Inc. (NASDAQ: ALLO) stock. The clinical-stage immuno-oncology company based in the San Francisco area posted a net loss for its most recent quarter, along with disappointing earnings. Some price targets were lowered afterward. At the beginning of the year, the company announced a strategy change. The stock started the year off strong but began to retreat in March. It was last seen down more than 21% year to date. Despite the target cuts, analysts on average see the share price rising to $11.25 in the coming year. That is well above the 52-week high. Three of the four analysts who cover the stock rate it at Buy or Strong Buy.

Vestis

• Buyer(s): 10% owner Corvex Management
• Total shares: more than 316,000
• Price per share: $12.08 to $12.65
• Total cost: over $3.9 million

Vestis Corp. (NYSE: VSTS) is a Georgia-based uniform and workplace supplies provider that spun out of Aramark in 2023, and this buyer’s stake is now up to nearly 17 million shares. When the recent fiscal second-quarter report fell short of expectations, the stock took a hit. It is down more than 43% since the beginning of the year, but less than 28% since last fall’s initial public offering. Shares have traded as high as $22.37 so far but were last seen changing hands near the bottom of the purchase price range above. The consensus recommendation of analysts is to buy shares.

Also see 6 Safe Blue Chip Dividend Stocks That Yield More Than Treasury Bonds.

Shift4 Payments

• Buyer(s): CEO Jared Isaacman
• Total shares: over 39,100
• Price per share: average $64.04
• Total cost: around $2.5 million

After scooping up more than $5.7 million worth of shares in the previous week, this buyer was back for more. Shift4 Payments Inc. (NYSE: FOUR) is a Pennsylvania-based provider of payment processing technology. Isaacman is also founder and a 10% owner with a stake now up to more than 622,000 shares. The company reaffirmed guidance despite missing estimates on the top and bottom lines for the most recent quarter and despite uncertainty over whether the company will be acquired. The stock is down almost 10% since the beginning of the year. Analysts see over 30% upside in the next 52 weeks, given their mean price target of $85.83. The consensus recommendation is to buy shares.

And Other Insider Buying

In the past week or so, some insider buying was reported at American States Water, BioCryst Pharmaceuticals, Cable One, Caterpillar, Cummins, HF Sinclair, Elanco Animal Health, Light & Wonder, Nikola, Norwegian Cruise Line, Rocket Companies, SoFi Technologies, and Synovus Financial as well.

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