24/7 Insights
- Warren Buffett has purchased more of his favorite energy stock.
- Other notable insider buying in the past week came from CEOs.
The past week saw some sizable insider purchases, highlighted by Warren Buffett bulking up on his favorite energy stock. A couple of chief executive officers showed faith in their companies, and an insider bought into an initial public offering. 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 and most prominent.
Occidental Petroleum
- Buyer(s): 10% owner Berkshire Hathaway
- Total shares: more than 1.7 million
- Price per share: $59.74 to $60.61
- Total cost: over $105.5 million
After scooping up nearly $153.3 million worth of shares in the prior week, Buffett returned to bolster the Occidental Petroleum Corp. (NYSE: OXY) stake to 252.3 million shares, or more than 28%. The Houston-based company beat first-quarter earnings estimates, though revenues fell short. Shares are down around 9% since the report and were last seen trading just below Buffett’s latest purchase price range. The share price is about the same as at the beginning of the year. The $71.72 consensus price target suggests about 20% upside potential in the next 12 months.
Zillow
- Buyer(s): director
- Total shares: over 2.3 million
- Price per share: $41.95 to $43.45
- Total cost: more than $99.9 million
Seattle-based real estate firm Zillow Group Inc. (NASDAQ: ZG) posted better-than-expected top and bottom line results for the first quarter. Since the earnings report was released, the stock is up about 12%. However, the share price is still 18% or so lower year to date, while the S&P 500 is up more than 18% in that time. Analysts have a mean price target of $52.87, which is over 14% higher than the current share price. Less than half of the 20 analysts who follow the stock recommend acquiring shares. Note that several executives sold some shares in May.
United Homes
- Buyer(s): CEO Michael Nieri and others
- Total shares: almost 2.6 million
- Price per share: $5
- Total cost: around $12.9 million
The chief executive of South Carolina-based homebuilder United Homes Group Inc. (NYSE: UHG) established a stake, and another executive purchased almost 1.3 million shares. The company posted solid revenue growth in the first quarter, and earlier there were changes to the board. The share price popped almost 22% in the past week but is still more than 14% lower year to date. Note that the stock traded well above $20 a share not long after its initial public offering in March of 2023.
Snowflake
- Buyer(s): a director
- Total shares: 76,200
- Price per share: $130.83 to $131.50
- Total cost: nearly $10.0 million
Shares of Snowflake Inc. (NYSE: SNOW) have been trading near an all-time low due to the Montana-based cloud computing company’s perceived slow response to a recent data breach. The stock was already in retreat before that, due to a disappointing earnings report back in March. It is now down about 37% year to date and well below the director’s purchase price range. On last look, the mean price target was $209.97, which would be almost 69% higher than the current share price. Analysts on average cautiously recommend buying shares.
Rapport Therapeutics
- Buyer(s): a director
- Total shares: over 558.800
- Price per share: $17
- Total cost: around $9.5 million
Boston-based Rapport Therapeutics Inc. (NASDAQ: RAPP) engages in the discovery and development of transformational small molecule medicines for patients suffering from central nervous system disorders. The stock went public earlier this month for $17 a share, and it has traded as high as $27.11 so far. The director is a biotech investor who also acquired shares of Arrivent Biopharma Inc. (NASDAQ: AVBP) earlier this year. His stake in Rapport Therapeutics is more than $1.8 million shares.
Golub Capital BDC
- Buyer(s): CEO David Golub
- Total shares: almost 512,300
- Price per share: $16.03 to $16.06
- Total cost: more than $8.2 million
Golub Capital BDC Inc. (NASDAQ: GBDC) is a business development company and a management investment company. In the past two quarterly reports, earnings fell short of Wall Street expectations. Shares have retreated almost 6% in the past month and were last seen trading for less than this buyer’s purchase price range. The S&P 500 is up more than 3% in that time. The $17.25 mean price target is less than the 52-week high, but it represents around 10% upside potential in the next 52 weeks. Just one of the six analysts following the stock has a Buy rating.
Also see 10 Life Lessons From Warren Buffett Everyone in Their 20s Should Hear.
And Other Insider Buying
In the past week or so, some insider buying was reported at Blackline, Bowlero, Cleveland-Cliffs, Fastenal, FS KKR Capital, GXO Logistics, HF Sinclair, Howard Hughes, Pebblebrook Hotel Trust, Rocket Companies, SAIC, Synovus Financial, Vail Resorts, VFC, and Waystar as well.
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