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Warren Buffett Back for More, Plus Big Insider Buying at Biotechs Too
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24/7 Wall St. Insights
- Warren Buffett again boosted his stake in the newly independent Sirius XM Holdings Inc. (NASDAQ: SIRI).
- Biotechs continued to prompt some big insider buying in the past week as well.
- Also: 2 Dividend Legends to Hold Forever.
Even with the third-quarter earnings reporting season underway, there was some notable action from insider buyers. Most notably, beneficial owner Berkshire Hathaway Inc. (NYSE: BRK-B) again boosted its stake in Warren Buffett’s favorite media stock. Biotech companies also continue to get some love from insiders. In addition, a repeat buyer came back for more shares of an entertainment giant. 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.
As mentioned, a 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.
Janux Therapeutics
- Buyer(s): 10% owner R.A. Capital Management
- Total shares: 1.2 million
- Price per share: $44.75
- Total cost: $53.7 million
Janux Therapeutics Inc. (NASDAQ: JANX) is a San Diego-based biopharmaceutical company that exceeded expectations on the top and bottom lines in its most recent quarterly report. And in the summer, it shook up its board of directors. The share price is up more than 47% since the earnings report, outperforming the Nasdaq and well above the buyer’s purchase price. Analysts have a $67.50 consensus price target, which means they see nearly 29% upside in the next 52 weeks. On average, analysts recommend buying shares. Note that this same buyer recently acquired shares of Bicara Therapeutics Inc. (NASDAQ: BCAX) as well.
Sirius XM
- Buyer(s): 10% owner Berkshire Hathaway
- Total shares: almost 1.6 million
- Price per share: $26.50 to $27.50
- Total cost: over $42.1 million
After scooping up over $86 million worth of shares in the prior week, Berkshire Hathaway returned to add more to its Sirius XM Holdings Inc. (NASDAQ: SIRI) stake. That is up to more than 110 million shares. The company recently completed its spin-off from Liberty Media, and it just hiked its dividend. The stock has gained 3% or so in the past month but is still down about 16% from six months ago. Shares were last seen trading near the bottom of the above price range. The $30.46 consensus price target signals about 16% upside in the coming year, but price target adjustments following the impending earnings report could change that. For now, only eight out of 18 analysts recommend buying shares.
Tectonic Therapeutic
- Buyer(s): a director
- Total shares: 300,000
- Price per share: $33.59
- Total cost: almost $10.1 million
Tectonic Therapeutic Inc. (NASDAQ: TECX) reported positive Phase 1 results last month for a heart failure treatment candidate. Earlier in the summer, the clinical-stage biotechnology company completed an acquisition of Avrobio. Since the trial results were released, the stock has gained about 93%, and shares were last seen changing hands for more than the buyer’s purchase price. The consensus price target is all the way up at $60 per share. Even the low target of $49 would be a gain of over 35% in the coming year. All four analysts who cover the stock recommend buying shares.
NerdWallet
- Buyer(s): 10% owner Topline Capital Management
- Total shares: less than 461,800
- Price per share: $11.35 to $12.05
- Total cost: almost $5.3 million
San Francisco-based NerdWallet Inc. (NASDAQ: NRDS) is an online personal finance company. Last month, it announced a $50 million share repurchase program. Since its most recent quarterly report, the shares have retreated more than 29%. Its third-quarter report is due next week. The mean price target is $16, which signals upside potential of 44% in the next 12 months. The consensus recommendation is to buy the stock. Note that the buyer also recently purchased Green Dot Corp. (NYSE: GDOT) shares as well.
Lions Gate Entertainment
- Buyer(s): 10% owner Liberty 77 Capital
- Total shares: around 646,000
- Price per share: $6.57 to $6.75
- Total cost: almost $5.3 million
This same buyer has been scooping up Lions Gate Entertainment Corp. (NYSE: LGF-A) shares since June, including more than $5 million worth in the previous week. When the entertainment giant reported its fiscal first-quarter results in August, they fell short of expectations on both the top and bottom lines. Since the report, the share price is over 13% lower, but it is handily above the buyer’s latest purchase price range. Analysts anticipate around 54% upside in the coming year to their consensus price target of $11.62. Note that the highest price target is up at $15.
Inhibikase Therapeutics
- Buyer(s): three directors
- Total shares: more than 1.9 million
- Price per share: $1.37
- Total cost: nearly $2.7 million
These buyers just joined the Inhibikase Therapeutics Inc. (NASDAQ: IKT) board of directors, and these transactions were part of a private placement that raised $110 million that will, in part, fund a Phase 2 trial. Shares of the Atlanta-based pharmaceutical company have jumped about 51% since it unveiled its Parkinson’s treatment pipeline earlier this month. The stock is up more than 95% since the beginning of the year, and analysts see lots of room for it to run in the next 12 months, as their mean price target is up at $60. Their consensus recommendation is to buy shares.
And Other Insider Buying
In the past week, some insider buying was reported at Atlas Energy Solutions, Heico, Ibotta, ManpowerGroup, Norfolk Southern, Pinnacle West, Rocky Mountain Chocolate Shop, Synovus Financial, and Texas Capital Bancshares as well.
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