24/7 Insights

• With the new quarter begun and second-quarter earnings reports starting to come in, insider buying has slowed to a trickle.
• However, a couple of chief executive officers and two beneficial owners stepped up and made notable purchases in the past two weeks.

The number of notable insider purchases has slowed to a trickle in the past couple of weeks. That is due in part to the prohibitions on insider transactions as the new earnings reporting season gets underway. However, a couple of beneficial owners increased their stakes in a tech company and an energy company. The CEOs of a biotech and retailer also showed some love for their companies as well. Let’s take a quick 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 the new earnings-reporting season has begun, so many insiders are prohibited from buying or selling shares. Below are some of the more notable insider purchases that were reported in the past two weeks, starting with the largest and most prominent.

Appian

• Buyer(s): 10% owner Abdiel Capital
• Total shares: almost 1.5 million
• Price per share: $30.94 to $36.31
• Total cost: around $47.6 million

After selling shares earlier in the year, this hedge fund manager returned to boost its stake in Appian Corp. (NASDAQ: APPN) to more than 7.3 million shares. The cloud computing and enterprise software company is due to report quarterly results soon. It posted mixed results in the first quarter. Despite a rally in the past month, the stock is still down more than 3% since the first-quarter report. But it was last seen trading for more than the buyer’s purchase price range. The stock has a Hold recommendation from the consensus of analysts. Their mean price target of $39.57 suggests 11% or so upside potential in the next 12 months.

Noble

• Buyer(s): 10% owner APMH Invest
• Total shares: around 638,000
• Price per share: $43.77 to $47.89
• Total cost: more than $28.9 million

This buyer now has a 20% stake in Noble Corp. PLC (NYSE: NE), which provides contract drilling services to the international oil and gas industry. The Sugar Land, Texas, company is acquiring Diamond Offshore Drilling for $1.6 billion to expand its drilling fleet. The share price is up about 11% since the deal was announced but still about 2% lower year to date. The Dow Jones industrials have seen a gain of more than 8% in that time. The $58.73 consensus price target indicates that analysts anticipate over 24% upside in the next 12 months. The buyer’s stake is now over 20 million shares.

Alpha Teknova

• Buyer(s): CEO Stephen Gunstream and others
• Total shares: over 12.2 million
• Price per share: $1.24
• Total cost: more than $15.1 million

These purchases were part of a private placement. California-based biotech company Alpha Teknova Inc. (NASDAQ: TKNO) intends to use the funds for general corporate purposes. Back in May, the company posted better-than-expected quarter results. The stock has been in retreat since the beginning of the year — until it popped more than 48% this week. Analysts see much more room to run, as their consensus price target of $5.50 suggests there is over 197% upside. The chief executive acquired $100,000 worth of stock in the above transactions. The bulk of the rest, more than 12 million shares, was scooped up by beneficial owner Telegraph Hill Partners IV.

Citi Trends

• Buyer(s): interim CEO Kenneth Seipel
• Total shares: more than 282,600
• Price per share: $18.50 and $19.30
• Total cost: almost $5.4 million

Citi Trends Inc. (NASDAQ: CTRN) fell short of Wall Street revenue estimates in its first-quarter report, but earnings were better than expected. The retailer’s chief executive stepped down in May, and Seipel, a director and former executive at J.C. Penney and Target, stepped into the interim CEO role. The share price has retreated more than 20% since the leadership transition. Yet, is still higher than the purchase price range above. Analysts see plenty of room for the stock to run, as their consensus target price is up at $31.00. In addition, note that beneficial owner and activist investor Fund 1 Investments also bought 6,000 shares.

Barnes & Noble Education

• Buyer(s): two directors
• Total shares: 235,000
• Price per share: $6.51 to $8.25
• Total cost: almost $1.7 million

Barnes & Noble Education Inc. (NYSE: BNED) is an operator of physical and virtual college bookstores. The shares have been in retreat since the fall of 2021, and they are down almost 94% year to date. The company recently had a reverse stock split, named a new chief executive officer, and reported quarterly results that missed on the top line but were better than expected on the bottom line. One of the two analysts who cover the stock recommends buying shares. However, the single posted price target is much lower than the current share price. Note that both directors are also executives at haptic technologies company Immersion Corp. (NASDAQ: IMMR).

And Other Insider Buying

In the past week, some insider buying was reported at AZZ, Biohaven, Delta Air Lines, Dorchester Minerals, Fidelity National Information Services, GameStop, Lions Gate Entertainment, Nvidia, SAIC, Sunrise Realty Trust, and U.S. Bancorp as well.

Be sure to grab a copy of our “2 Dividend Legends to Hold Forever” report if you are looking for more great stock ideas.

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