Investing

Huge Insider Buying at a Software Giant, Railroad Operator, and More

Trey Thoelcke

Published: June 9, 2024 9:15 am

24/7 Insights

• In the past week, insiders scooped up shares of a software giant and a leading railroad operator.
• Others took advantage of a stock offering or made return appearances at the buy window.

The past week saw sizable insider purchases at a software giant with big insider selling and a leading railroad operator under scrutiny. In addition, an insider took advantage of a stock offering, and others made return appearances at the buy window. Let’s take a look.

Is Insider Buying Important?

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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.

Salesforce

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• Buyer(s): director
• Total shares: 428,000
• Price per share: $233.17
• Total cost: nearly $99.8 million

While executives at Salesforce Inc. (NYSE: CRM) have been selling shares, this director bucked the trend with a huge purchase. The stock tumbled around 10% after its first-quarter report. While it has recovered somewhat, the share price is still down more than 6% since the beginning of the year. However, it is over 17% higher than a year ago. Analysts on average think the shares will reach $300.62 apiece in the next 52 weeks. That would be a gain of more than 23%. All but four of the 45 analysts who follow the stock recommend buying shares.

PBF Energy

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• Buyer(s): 10% owner Control Empresarial de Capitales
• Total shares: 279,000
• Price per share: $44.75 to $45.43
• Total cost: around $12.6 million

Refiner PBF Energy Inc. (NYSE: PBF) is based in Parsippany, New Jersey. It posted better-than-expected top and bottom line results for the first quarter. Since the earnings report was released, the stock is down about 11%. The share price is still 6% or so higher year to date, and the Dow Jones industrials are up only about 3% in that time. Analysts have a mean price target of $55.55, which is almost 19% higher than the current share price. Yet, only six of the 17 analysts who follow the stock recommend acquiring shares. Note that this owner also bought shares in January.

CARGO Therapeutics

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• Buyer(s): 10% owner Samsara BioCapital
• Total shares: 294,000
• Price per share: $17
• Total cost: nearly $5.0 million

This buyer took advantage an offering of common stock to increase its stake to more than 4.4 million CARGO Therapeutics Inc. (NASDAQ: CRGX) shares. This California-based clinical-stage biotechnology company posted a first-quarter earnings beat and provided a business update. It also just added a director to its board. Shares are down 4% or so since the earnings report, but they are still up over 22% since its initial public offering last November. The mean target price of $32 a share represents more than 77% upside in the next 12 months. The consensus recommendation of analysts is to buy shares.

Norfolk Southern

Source: emmett_ns_tullos / Flickr

• Buyer(s): six directors
• Total shares: 15,010
• Price per share: $219.00 to $221.00
• Total cost: over $3.3 million

Norfolk Southern Corp. (NYSE: NSC) has had a board shakeup, including a new board chair. The company has faced activist efforts, and it recently reached a settlement related to an Ohio derailment. The stock has retreated more than 11% in the past 90 days but is still up over 6% from a year ago. Analysts anticipate about 21% upside in the next year, given the consensus price target of $271.69. Yet, only eight of 27 analysts who follow the stock recommend buying shares, which is fewer than in recent months.

GeneDx

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• Buyer(s): a director
• Total shares: 170,000
• Price per share: $19.56 to $20.61
• Total cost: about $3.6 million

After picking up $3.4 million worth of GeneDx Holdings Corp. (NASDAQ: WGS) shares the previous week, this buyer returned to the buy window. The stake increased to almost 3.1 million shares. The Connecticut-based health care information provider posted better-than-expected first-quarter results, and the share price is nearly 134% higher since then. The stock is up almost 840% since the beginning of the year. However, it is well off an all-time high above $850 a share in early 2021, and the share price has overrun the current consensus price target. Even the $24 high price target is lower.

Also see 10 Life Lessons From Warren Buffett Everyone in Their 20s Should Hear.

Shift4 Payments

Source: Tero Vesalainen / iStock via Getty Images

• Buyer(s): CEO Jared Isaacman
• Total shares: over 29,600
• Price per share: $68.89 to $69.95
• Total cost: around $2.5 million

After scooping up about $2.5 million worth of shares recently, 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 651,000 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 up over 20% in the past month. Analysts see over 19% 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

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In the past week or so, some insider buying was reported at Advance Auto Parts, American States Water, Atlanta Braves, Dentsply Sirona, Fortinet, Leggett & Platt, Life Time, Norwegian Cruise Line, Paycom Software, Republic Services, Rocket Companies, and SLM as well.

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