24/7 Wall St. Insights
- There were notable insider purchases in a handful of energy companies last week, as well as at a leading fintech firm and a casino operator.
- Insiders bolstering their stakes included Mexican billionaire Carlos Slim and Dallas Cowboys owner Jerry Jones.
- Also: 2 Dividend Legends to Hold Forever.
The market pullback last week seems to have tempted insiders to scoop up some shares. There were notable insider purchases in a handful of energy companies, as well as at a leading fintech firm and a casino operator. Insiders bolstering their stakes included Mexican billionaire Carlos Slim and Dallas Cowboys owner Jerry Jones. Let’s take 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 still 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.
Block
- Buyer(s): a director
- Total shares: around 434,400
- Price per share: $56.25 to $57.24
- Total cost: about $25.0 million
The chief financial officer and other executives sold some Block Inc. (NYSE: SQ) shares in July, but this director bucked the trend. This California-based fintech company is restructuring to adapt to an increasingly AI-driven world. It also just posted better-than-expected earnings for the most recent quarter. The stock was last seen trading for more than the price range above and is about 2% lower than a year ago. The consensus price target is up at $87.66, which would be a gain of about 44%. Of 31 analysts who follow the stock, 17 recommend buying shares.
Comstock Resources
- Buyer(s): 10% owner Blue Star Exploration
- Total shares: almost 2.5 million
- Price per share: $8.16 to $8.82
- Total cost: over $21.0 million
Comstock Resources Inc. (NYSE: CRK) posted disappointing quarterly results last month, but now Dallas Cowboys owner Jerry Jones has boosted this stake to about 197.3 million shares. That is more than a 67% stake in this Texas-based independent energy company. Shares pulled back almost 20% after the earnings report but have begun to recover. They are now 2% or so higher year to date and above the buyer’s purchase price range. The $10.18 consensus price target signals more than 12% upside, yet analysts on average recommend holding shares.
Red Rock Resorts
- Buyer(s): CEO Frank Fertitta III and another executive
- Total shares: 400,000
- Price per share: $49.77 to $54.49
- Total cost: around $20.9 million
Las Vegas-based gaming and entertainment company Red Rock Resorts Inc. (NASDAQ: RRR) posted second-quarter results that topped expectations on the top and bottom lines. Despite bouncing between about $45 and $62 a share in the past month, the stock is trading in the same neighborhood as at the beginning of the year. The share price was last seen within the purchase price range above. The $64.85 consensus price target is higher than the 52-week high and signals about 18% upside from the current share price. All but one of the 10 analysts who cover the stock recommend buying shares. Note that Fertitta is the son of the founder and also a beneficial owner.
PBF Energy
- Buyer(s): 10% owner Control Empresarial de Capitales
- Total shares: 507,000
- Price per share: $35.53 to $39.60
- Total cost: almost $19.3 million
This Carlos Slim-controlled investment firm has been scooping up shares of Refiner PBF Energy Inc. (NYSE: PBF) since early June and now has a stake of almost 18.3 million shares. The New Jersey-based company just posted mixed quarterly results, due in part to lower refining margins. The stock has been in retreat since early April and is now down almost 20% year to date. However, shares were last seen trading a little above the buyer’s latest purchase price range. Analysts have a mean price target of $46.80, which would be a gain of about 26% from the current share price. Yet, only six of the 17 analysts who follow the stock recommend acquiring shares. Note that the same owner also recently acquired shares of ProKidney Corp. (NASDAQ: PROK) and Talos Energy (see below).
Talos Energy
- Buyer(s): 10% owner Control Empresarial de Capitales
- Total shares: more than 1.2 million
- Price per share: $9.81 to $11.50
- Total cost: around $13.7 million
After picking up over $2.8 million worth of Talos Energy Inc. (NYSE: TALO) shares in the prior week, this buyer came back for more. The stake is now up to almost 39.5 million shares. The Houston-based oil and gas company reported better-than-expected second-quarter results and recently announced a share buyback program. Shares were changing hands for more than the latest purchase price range and for over 15% 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 50% or so. Their consensus recommendation is to buy shares.
Mobileye Global
- Buyer(s): CEO Ammon Shashua and another director
- Total shares: more than 638,300
- Price per share: $15.46 to $17.00
- Total cost: more than $10.5 million
Mobileye Global Inc. (NASDAQ: MBLY) is a provider of driver assist and autonomous driving technologies. Its second-quarter results were better than expected, but it slashed its guidance due to demand uncertainty. Since the beginning of the year, the stock is down about 59%, after recently hitting a 52-week low of $14.33 a share. So far, analysts see shares rising nearly 79% in the coming 12 months to $27.63 apiece, and their consensus recommendation is to buy the shares. Note that Shashua’s stake is greater than 4 million shares.
Transocean
- Buyer(s): a director
- Total shares: 2.0 million
- Price per share: $5.23
- Total cost: more than $10.4 million
Off-shore driller Transocean Ltd. (NYSE: RIG) just reported a wider net loss and disappointing revenue for its second quarter. Its fleet status report in July reported a backlog of about $8.8 billion. The share price slipped marginally in the past week but is fractionally higher than six months ago. The $7.07 consensus price target represents more than 37% upside in the coming year, though that target is less than the 52-week high. Note that only 13 of 36 analysts who cover the stock have a Buy rating.
And Other Insider Buying
In the past week, some insider buying was reported at Apollo Global Management, Bausch + Lomb, Beacon Roofing Supply, Blackstone, Crocs, Intel, Kinder Morgan, Lions Gate Entertainment, MGM Resorts, Norfolk Southern, Royal Caribbean Cruises, Teladoc Health, and Utz Brands as well.
Prediction: This Dividend Stock Will Be the Best Performer the Rest of 2024
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