24/7 Wall St. Insights

• As we race toward the end of the year, the past week brought some huge insider share purchases.
• These included a contrarian buy at an e-commerce platform operator and shows of support for a troubled satellite provider and a driller expanding its fleet.
• Also: 2 Dividend Legends to Hold Forever.

The presidential election is behind us and we are racing toward the end of the year. The past week brought more notable insider buying, including a huge contrarian buy at an e-commerce platform operator, and insiders showing support for a troubled satellite provider and for a driller expanding its fleet. A biotech, an insurer, and an entertainment giant also drew sizable insider interest. 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.

The earnings-reporting season continues, so many insiders are still 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.

Coupang

• Buyer(s): 10% owner Greenoaks Capital Partners
• Total shares: more than 2.2 million
• Price per share: $23.62 to $25.12
• Total cost: over $54.6 million

Coupang Inc. (NYSE: CPNG) founder and CEO Bom Kim just sold a huge batch of shares as part of a prearranged plan. However, this buyer boosted its stake in the Seattle-based e-commerce platform operator to almost 53 million shares. The stock is more than 66% higher than a year ago, handily outperforming the broader markets. The $29.27 consensus price target is greater than the 52-week high, and it is around 15% higher than the current share price. All but three of the 18 analysts who cover the stock recommend buying shares, six of them with Strong Buy ratings. The stock is also a top pick of billionaires Bill Gates and Stanley Druckenmiller. Note though that, besides Kim, another executive sold some shares recently as well.

EchoStar

• Buyer(s): a director
• Total shares: more than 1.5 million
• Price per share: $28.04
• Total cost: around $43.5 million

Satellite and broadband services provider EchoStar Corp. (NASDAQ: SATS) released disappointing third-quarter results, and it has been attempting to exit the pay-TV business. The stock is down about 11% in the past month to well below the purchase price above. Though the share price is still up more than 55% since the beginning of the year, analysts do not currently see much room to run in the coming year, given their consensus price target of $24.17. Only two of six analysts covering the stock recommend buying shares. Cowen just maintained its Buy rating.

Noble

• Buyer(s): 10% owner APMH Invest
• Total shares: 700,000
• Price per share: $34.24 to $35.96
• Total cost: more than $24.5 million

This buyer now has about a 31 million share stake in Noble Corp. PLC (NYSE: NE), which provides contract drilling services to the international oil and gas industry. The Sugar Land, Texas, company recently acquired Diamond Offshore Drilling to expand its drilling fleet, and more recently posted disappointing quarterly earnings. The share price is down about 3% since the report, after hitting a multiyear low of $31.00. However, the $45.90 mean price target indicates that analysts anticipate almost 34% upside in the next 12 months. Their consensus recommendation is to buy shares and has been for at least three months.

Tyra Biosciences

• Buyer(s): 10% owner R.A. Capital Management
• Total shares: over 1.2 million
• Price per share: $16.25
• Total cost: more than $19.8 billion

Shares of Tyra Biosciences Inc. (NASDAQ: TYRA) tumbled from a multiyear high recently, and one director has been selling shares since then. Yet, this buyer took advantage of the dip to boost its stake to nearly 8.7 million shares. This oncology-focused company beat profit estimates in the past two quarterly reports. The share price is still 45% or so higher than a year ago, similar to the gain in the Nasdaq. The $31.00 consensus price target indicates that analysts now over 95% upside potential in the next 52 weeks. All six analysts who cover the stock recommend buying shares. Note that also recently acquired shares of biotechs Janux Therapeutics Inc. (NASDAQ: JANX) and Septerna Inc. (NASDAQ: SEPN).

Oscar Health

• Buyer(s): co-founder Joshua Kushner
• Total shares: around 1.5 million
• Price per share: $13.20 to $14.29
• Total cost: over $14.4 million

Oscar Health Inc. (NYSE: OSCR) is a New York-based health insurer. Its third-quarter report showed robust revenue growth and that it is on the road to profitability. The share price is up more than 132% from a year ago, handily outperforming the broader markets, and was last seen well above the purchase price range. Analysts see almost 47% further upside in the coming year to their consensus price target of $21.75. Four out of six analysts who cover the stock recommend buying shares. Note that Kushner’s stake is up to over 5.8 million shares, making him a beneficial owner.

Lions Gate Entertainment

• Buyer(s): 10% owner Liberty 77 Capital
• Total shares: around 1.2 million
• Price per share: $6.58 to $6.75
• Total cost: less than $8.6 million

This same buyer has been scooping up Lions Gate Entertainment Corp. (NYSE: LGF-A) shares since last June. When the entertainment giant reported its fiscal first-quarter results in August, they fell short of expectations on both the top and bottom lines, and the most recent report was disappointing as well. The share price is about 18% lower than a year ago, but it was last seen above the buyer’s latest purchase price range. Analysts anticipate almost 38% upside in the coming year to their consensus price target of $10.42. Note that the highest price target recently dropped to $13.

And Other Insider Buying

In the past week, some insider buying was reported at AGCO, Biglari, Crocs, Dentsply, Diamondback Energy, Diebold Nixdorf, Enphase Energy, Hain Celestial, Herbalife, Hims & Hers Health, IBM, Lemonade, Lyft, Nerdy, PBF Energy, RXO, Rockwell Automation, SolarEdge Technologies, Warner Bros. Discovery, and W.K. Kellogg as well.

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