24/7 Wall St. Insights

• In the past week or so, initial public offerings at a biotech and an investment management firm attracted huge insider buying.
• In addition, a couple of chief executive officers showed some love for their struggling financial firms.
• Also: 2 Dividend Legends to Hold Forever.

While the number of notable insider purchases has slowed as the second-quarter earnings reporting season ramps up, a pair of initial public offerings in the past week tempted insiders to make huge buys. One was a biotech and the other was an investment firm. Two other financial companies saw their chief executives offering support by picking up shares while their firms face headwinds. Let’s have a quick look at these transactions.

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 week or so, starting with the largest and most prominent.

Artiva Biotherapeutics

• Buyer(s): a director and four 10% owners
• Total shares: more than 13.7 million
• Price per share: $12.00
• Total cost: almost $165.0 million

These insiders bought into the Artiva Biotherapeutics Inc. (NASDAQ: ARTV) initial public offering. The San Diego-based biotechnology company is focused on the treatment of hematologic cancers. The director scooped up about 2 million shares, which totaled around $25 million. Beneficial owner R.A. Capital Management made the largest of these purchases, over 8.3 million shares for nearly $100 million. Note that R.A. Capital Management also recently purchased shares of Aerovate Therapeutics Inc. (NASDAQ: AVTE) and Eliem Therapeutics Inc. (NASDAQ: ELYM). Artiva shares were last seen trading for a little less than the IPO price.

Pearl Diver Credit Company

• Buyer(s): 10% owner University of Wisconsin Foundation
• Total shares: almost 1.5 million
• Price per share: $19.79 to $20.00
• Total cost: less than $29.2 million

Newly organized, externally managed, non-diversified, closed-end management investment firm Pearl Diver Credit Company Inc. (NYSE: PDCC) also had an IPO. It offered 2.2 million shares and raised $50.6 million, with which it aims to build a diversified portfolio of senior secured U.S. corporate loans through investments in equity tranches of collateralized loan obligations. The company will be externally managed by Pearl Diver Capital, which has $2.6 billion in assets under management across multiple private funds backed by a variety of institutional investors. Here too, shares were last seen trading for less than the IPO price.

Appian

• Buyer(s): 10% owner Abdiel Capital
• Total shares: 190,000
• Price per share: $34.69 to $36.03
• Total cost: around $6.7 million

After picking up more than $47 million worth of shares last week, this hedge fund manager returned to further boost its stake in Appian Corp. (NASDAQ: APPN) to more than 7.5 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 less than 2% since the first-quarter report. But it was last seen above the top of the buyer’s latest purchase price range. The stock has a Hold recommendation from the consensus of analysts. Their mean price target of $40.14 suggests about 13% upside potential in the next 12 months.

Truist Financial

• Buyer(s): CEO William Rogers Jr.
• Total shares: 57,300
• Price per share: $43.96
• Total cost: over $2.5 million

Truist Financial Corp. (NYSE: TFC) just topped Wall Street earnings estimates despite declining profits. Earlier, the Charlotte, North Carolina-based financial services company passed its Federal Reserve stress test and has been cutting costs. Since the beginning of the year, the share price is up 20% or so. The S&P 500 is about 14% higher in that time. Truist shares were last seen trading above $44, but analysts anticipate only 4% or so in the coming year to their consensus price target of $46.11. Note that Rogers, who is also chair of the board of directors, now has a stake of less than 569,300 shares.

Charles Schwab

• Buyer(s): CEO Walter Bettinger and another executive
• Total shares: 35,000
• Price per share: $62.02 to $66.26
• Total cost: more than $2.2 million

Charles Schwab Corp. (NYSE: SCHW) is a Texas-based brokerage firm. It was one of the many companies affected by the CrowdStrike outage, and it just named a new chief financial officer. Shares are about 15% lower than when it posted mixed second-quarter results, as well as down around 3% since the beginning of the year. Of the 19 analysts who cover the stock, 14 recommend buying shares, five of them with Strong Buy ratings. Their $74.78 consensus price target signals more than 12% upside potential in the next 12 months. At least one analyst sees the share price going to $88 in that time.

And Other Insider Buying

In the past week, some insider buying was reported at Atlas Energy Solutions, Community Trust Bancorp, Dorchester Minerals, J.B. Hunt Transport Services, Kayne Anderson BDC, Lions Gate Entertainment, Scholastic, Selective Insurance Group, Texas Capital Bancshares, Texas Pacific Land, and UPS as well.

∴

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.