24/7 Wall St. Insights
- Summer gave way to autumn this past week, and notable insider buying continued.
- A couple of repeat buyers further boosted their stakes, and the biotech industry was again well represented.
- Also: 2 Dividend Legends to Hold Forever.
Summer gave way to autumn this past week, and notable insider buying continued. A public offering of shares prompted a huge purchase from a beneficial owner. Meanwhile, a couple of repeat buyers further boosted their stakes, and the biotech industry was again well represented. Let’s take a quick look at these transactions.
Is Insider Buying Important?
What does insider buying tell us?
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 earnings-reporting season ramps up again, insiders will 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.
America’s Car-Mart
A public offering tempts a beneficial owner.
- Buyer(s): 10% owner Adam Peterson and a director
- Total shares: more than 814,000
- Price per share: $43
- Total cost: around $35.0 million
America’s Car-Mart Inc. (NASDAQ: CRMT) is an Arkansas-based used car dealership operator that recently appointed a new chief operating officer and reported better-than-expect quarterly revenue. However, the stock is down over 28% since that earnings report and is trading near a multiyear low. The consensus price target is $74.33, but only one out of five analysts recommends buying shares. The past week’s insider buying was part of a public offering of shares. Peterson purchased almost all the shares mentioned above, and his stake is now shy of 1.6 million shares.
PBF Energy
A beneficial owner and return buyer.
- Buyer(s): 10% owner Control Empresarial de Capitales
- Total shares: 705,000
- Price per share: $30.84 to $32.10
- Total cost: almost $22.4 million
This Carlos Slim-controlled investment firm has been scooping up shares of PBF Energy Inc. (NYSE: PBF | PBF Price Prediction) since early June. Now its stake is up to almost 23.4 million shares. Last month, the New Jersey-based refiner posted mixed quarterly results, due in part to lower refining margins. The stock has been in retreat since early April, recently hit a new 52-week low, and was last seen just above the buyer’s latest purchase price range. Analysts have a mean price target of $38.10, which would be a gain of over 21% from the current share price. Yet, only six of the 17 analysts who follow the stock recommend acquiring shares.
Sable Offshore
Who is buying at a multiyear high?
- Buyer(s): 10% owner Pilgrim Global ICAV
- Total shares: 750,000
- Price per share: $20
- Total cost: $15.0 million
This transaction was part of a private placement to institutional investors. Houston-based Sable Offshore Corp. (NYSE: SOC) is an oil and gas exploration and development company that was known as Flame Acquisition until earlier this year. Shares were last seen trading for more than the purchase price above and near a multiyear high. The stock is up 110% or so since the beginning of the year. Analysts see it rising more than 33% in the next 12 months to their mean price target of $31.33. Their consensus recommendation is to buy shares. Note that the buyer above has a stake of almost 8.8 million shares.
Capricor Therapeutics
Part of a huge distribution deal.
- Buyer(s): 10% owner Nippon Shinyaku
- Total shares: almost 2.8 million
- Price per share: $5.36
- Total cost: about $15.0 million
This buyer is a Japanese pharmaceutical firm, and the private placement is part of a deal that will see Capricor Therapeutics Inc. (NASDAQ: CAPR) expand distribution for its Duchenne muscular dystrophy treatment in Europe. The stock jumped to a multiyear high on the news and is up more than 121% year to date. Analysts see plenty more room for shares to run, as their mean price target is up at $31.60. Their consensus recommendation is to buy shares. The buyer’s stake in this San Diego-based clinical-stage biotechnology company is up to almost 7.1 million shares. And note that three biotech IPOs prompted some huge insider buying in the previous week.
Corbus Pharmaceuticals
Wall Street remains optimistic despite a pullback.
- Buyer(s): 10% owner Cormorant Asset Management
- Total shares: 350,000
- Price per share: $17.00 to $22.50
- Total cost: around $7.0 million
Corbus Pharmaceuticals Holdings Inc. (NASDAQ: CRBP) recently appointed a director to its board. Shares of the biopharmaceutical company retreated in reaction to last week’s disappointing results from a competitor, but they are still up about 250% year to date. The stock was last seen trading within the buyer’s purchase price range. Wall Street remains enthusiastic and has a consensus price target of $67. All three analysts who cover the stock recommend buying shares. It is a top pick for the next 12 months at Oppenheimer. Note that the stake of the buyer above is almost 2.4 million shares, and that the buyer is also a beneficial owner of EyePoint Pharmaceuticals Inc. (NASDAQ: EYPT).
Lions Gate Entertainment
A return buyer shows more love for this stock.
- Buyer(s): 10% owner Liberty 77 Capital
- Total shares: more than 533,800
- Price per share: $6.70 to $6.75
- Total cost: around $3.6 million
This same buyer has been scooping up Lions Gate Entertainment Corp. (NYSE: LGF-A) shares throughout the summer. When the entertainment giant reported its fiscal first-quarter results last month, they fell short of expectations on both the top and bottom lines. Since the report, the share price is over 3% lower, but it is handily above the buyer’s latest purchase price range. Analysts anticipate over 45% upside in the coming year to their consensus price target of $11.62. Note that the highest price target is up at $15.
And Other Insider Buying
Some smaller insider buys were seen at Biohaven, Equitable, and more.
In the past week, some insider buying was reported at AllianceBernstein, Appian, Biohaven, Compass Diversified, Equitable, and HighPeak Energy.
Prediction: This Will Be the World’s First $5 Trillion Company
Top Gaining Stocks
Top Losing Stocks