24/7 Wall St. Insights
- In the past week, there was sizable insider buying at a couple of energy companies and a transportation company.
- Some repeat buyers stepped up to boost their stakes as well.
- Also: 2 Dividend Legends to Hold Forever.
While the number of notable insider purchases has slowed as the second-quarter earnings reporting season is in full swing, there was some sizable buying at a couple of energy companies and a transportation company. In addition, some repeat buyers stepped up to boost their stakes. 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 is underway, 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, starting with the largest and most prominent.
NextDecade
- Buyer(s): 10% owner HGC Next Inv
- Total shares: almost 11.7 million
- Price per share: $7.50
- Total cost: less than $87.7 million
This transaction was made on behalf of Hanwha Aerospace and other related entities. Houston-based NextDecade Corp. (NASDAQ: NEXT) is an energy company focused on liquefied natural gas (LNG) export projects and associated pipelines. Its share price is up more than 72% since the beginning of the year, and they were last seen trading for about 9% above the purchase price. The two analysts who follow the stock recommend buying shares. Note though that another 10% owner, York Capital Management Global, just sold around 35 million shares.
PAM Transportation Services
- Buyer(s): a director
- Total shares: around 4.0 million
- Price per share: $19.79 to $20.00
- Total cost: over $74.0 million
This purchase was part of a transfer of shares within the Moroun family. Trucking and logistics firm PAM Transportation Services Inc. (NASDAQ: PTSI) has seen its stock rise more than 23% in the past 90 days, but it is still down almost 4% year to date. Analysts see 20% further upside in the next 52 weeks to $24.00 a share. However, the consensus recommendation of three analysts who cover the stock is to hold shares. The company just reported a net loss for its second quarter that was deeper than Wall Street expected.
Appian
- Buyer(s): 10% owner Abdiel Capital
- Total shares: 450,000
- Price per share: $36.16 to $38.48
- Total cost: more than $16.7 million
After picking up more than $6 million worth of shares the prior week, this hedge fund manager returned to further boost its stake in Appian Corp. (NASDAQ: APPN) to more than 8.1 million shares. The cloud computing and enterprise software company posted better-than-expected second-quarter sales but also a net loss. Shares plunged after the report and are down more than 13% year to date and below the buyer’s latest purchase price range. The stock has a Hold recommendation from the consensus of analysts. Their mean price target has dropped to $38.00.
Lions Gate Entertainment
- Buyer(s): 10% owner Liberty 77 Capital
- Total shares: more than 385,800
- Price per share: $8.25 to $8.57
- Total cost: almost $3.3 million
Lions Gate Entertainment Corp. (NYSE: LGF-A) is expected to post its fiscal first-quarter results next week. A better-than-expected fourth-quarter report failed to lift shares, as the company is restructuring. Since the beginning of the year, the share price is down almost 20%. The S&P 500 is over 12% higher in that time. Shares were last seen trading above the buyer’s purchase price range, and analysts anticipate nearly 50% or so in the coming year to their consensus price target of $13.02. Note that this same buyer acquired more than $8 million worth of the shares back in June.
Talos Energy
- Buyer(s): 10% owner Control Empresarial de Capitales
- Total shares: 250,000
- Price per share: $11.40
- Total cost: more than $2.8 million
Houston-based Talos Energy Inc. (NYSE: TALO) also had a return buyer. The Carlos Slim-controlled investment firm, which also has been scooping up shares of refiner PBF Energy Inc. (NYSE: PBF), has boosted its Talos stake to more than 38 million shares. The company recently announced a share buyback program, and it is due to share quarterly results soon. Shares are changing hands for less than the purchase price above and for almost 23% less than at the start of the year. However, analysts anticipate that the stock will rise to $18.06 a share in the next 12 months, which would be a gain of 64% or so. Their consensus recommendation is to buy shares.
And Other Insider Buying
In the past week, some insider buying was reported at Cleveland-Cliffs, Darling Ingredients, General Motors, Kaiser Aluminum, Lamb Weston Holdings, Lineage, LKQ, Loews, Norfolk Southern, and NXP Semiconductors as well.
Prediction: This Tech Stock Will Be the Best Performer the Rest of 2024
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