Investing

Huge Insider Buying at a Warren Buffett Pick and 5 Other Stocks

Trey Thoelcke

Published: June 30, 2024 9:15 am

24/7 Insights

• With the second quarter winding up, some insiders are making sizable purchases of stock.
• A refiner continues to see insider buys, and a director picked up shares of a Warren Buffett pick.

With the first-quarter earnings-reporting season effectively over and the calendar quarter winding down, some corporate insiders have been stepping up to make notable insider purchases. That includes at a Warren Buffett favorite telecom and a refiner that has seen hot buying action throughout June. An investment management firm and a specialty retailer were also in the mix. 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 when the new earnings-reporting season begins, many insiders will be 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.

PBF Energy

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• Buyer(s): 10% owner Control Empresarial de Capitales
• Total shares: 846,000
• Price per share: $43.84 to $45.00
• Total cost: more than $37.3 million

After scooping up $28 million worth of shares in the prior week, this buyer came back for more. 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 14%. The share price is about 3% higher year to date, nearly as much as the Dow Jones industrials in that time. Analysts have a mean price target of $52.50, which is more than 16% higher than the current share price. Yet, only six of the 17 analysts who follow the stock recommend acquiring shares. Note that this owner’s stake is up to more than 17.4 million shares, and the same owner also recently acquired shares of ProKidney Corp. (NASDAQ: PROK) and Talos Energy Inc. (NYSE: TALO).

RH

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• Buyer(s): CEO Gary Friedman
• Total shares: almost 46,300
• Price per share: $213.30 to $219.99
• Total cost: nearly $10.0 million

Specialty retailer RH (NYSE: RH), better known as Restoration Hardware, posted a bigger-than-expected first-quarter net loss. Earlier in the year, the company appointed a chief real estate and development officer. The share price has fallen about 16% since the earnings report and is down 18% or so year to date. The S&P 500 is up about 15% since the beginning of the year. Analysts anticipate upside of more than 26% for the shares in the coming year, given their consensus price target of $302.13. However, only four of 21 analysts who cover the stock recommend buying shares. Friedman’s stake is up to more than 3.3 million shares, making him a beneficial owner.

NeuroBo Pharmaceuticals

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• Buyer(s): 10% owner Dong-A ST
• Total shares: more than 2.5 million
• Price per share: $3.13
• Total cost: over $7.9 million

NeuroBo Pharmaceuticals Inc. (NASDAQ: NRBO) is a clinical-stage biotechnology company focused on developing and commercializing novel pharmaceuticals to treat cardiometabolic diseases. It just began a phase 1 trial for an obesity treatment. The stock popped more than 21% in the past week and is now up 30% or so since the beginning of the year. Analysts have big expectations, as their $27.67 consensus price target would be a gain of almost 473%. The stock last traded at that level in late 2022.

Franklin Resources

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• Buyer(s): 10% owner Charles Johnson
• Total shares: 200,000
• Price per share: $22.68 to $22.92
• Total cost: over $4.5 million

This buyer is a former board chair of the California-based asset management firm, and he also bought 100,000 shares earlier in June. Franklin Resources Inc. (NYSE: BEN) posted mixed second-quarter results in April, which resulted in several price target reductions. The share price is less than 4% lower since the report and down more than 24% year to date. The $25.10 mean price target suggests there is about 12.3% upside in the next 52 weeks. Yet, of the 13 analysts covering the stock, only one rates it as a Buy.

Liberty Latin America

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• Buyer(s): a director
• Total shares: 400,000
• Price per share: $8.50 to $9.20
• Total cost: almost $3.6 million

Even though Liberty Latin America Ltd. (NASDAQ: LILA) posted mixed first-quarter results as it makes strategic adjustments, shares rose afterward. This telecom is a Warren Buffett pick, and the stock is up more than 31% year to date. Analysts on average feel the share price has more than 12% more upside to $10.70. Two of the four analysts who follow the stock recommend buying shares, and both have Strong Buy ratings. The director’s latest purchases pushed his stake to more than a million shares.

ClearSign Technologies

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• Buyer(s): former director
• Total shares: over 3.3 million
• Price per share: $0.91
• Total cost: more than $3.1 million

Tulsa-based emissions and energy efficiency technology company ClearSign Technologies Corp. (NASDAQ: CLIR) just announced its largest boiler burner sale to date. It posted solid first-quarter numbers, and in April appointed a new member of the board of directors. Despite jumping 32% or so in the past week, the shares are over 22% lower than at the start of the year. Two analysts recommend buying shares, but there is no consensus price target. Note that the purchaser above recently resigned from the board and is a beneficial owner with a stake of more than 9.5%.

Also see Nvidia Stock Price Prediction: What Will It Be in 1 Year.

And Other Insider Buying

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In the past week or so, some insider buying was reported at Arcadium Lithium, Atlanta Braves, Atlas Energy Solutions, CME, Dolby Laboratories, Howard Hughes, Lions Gate Entertainment, Marvell Technology, Mastercraft Boat, Nextnav, Re/Max, Rocket Companies, SAIC, and Salesforce as well.

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