Investing

Post-Thanksgiving Insider Buying Includes Warren Buffett Pick

Trey Thoelcke

Published: December 8, 2024 8:45 am

Key Points

• The number of big insider share purchases slowed in the past couple of weeks.
• Yet, some repeat buyers are still stepping up to the buy window, including Mexican billionaire Carlos Slim.
• A Warren Buffett pick also saw insider buying.
• Take this quiz to see if you’re on track to retire. (sponsored)

Thanksgiving is in the rearview mirror, and the race to the end of the year is on. The number of notable insider purchases dwindled recently, but some repeat buyers are still stepping up to the buy window. That includes Mexican billionaire Carlos Slim and a couple of chief executives. 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 has wound down, so fewer insiders are prohibited from buying or selling shares. Below are some of the more notable insider purchases that were reported in the past two weeks, starting with the largest and most prominent.

PBF Energy

• Buyer(s): 10% owner Control Empresarial de Capitales
• Total shares: nearly 1.2 million
• Price per share: $30.90 to $31.83
• Total cost: more than $36.9 million

This Carlos Slim-controlled investment firm has been scooping up shares of PBF Energy Inc. (NYSE: PBF) since early June. Now its stake is up to nearly 27.6 million shares. The New Jersey-based refiner recently posted mixed quarterly results and hiked its dividend. The stock has been in retreat since early April, hit a new 52-week low last month, and was last seen trading for less than the buyer’s latest purchase price range. Analysts have a mean price target of $32.00, which represents about 4% upside potential in the next 12 months. Only one of the 15 analysts who follow the stock recommends acquiring shares.

Prospect Capital

• Buyer(s): CEO John Barry and another officer
• Total shares: over 2.4 million
• Price per share: $4.60 to $4.83
• Total cost: more than $11.5 billion

Prospect Capital Corp. (NASDAQ: PSEC) recently cut its dividend, the first cut since 2017. Shares of the New York-based business development company tumbled 19% or so afterward and are more than 21% lower than a year ago. Shares were last seen changing hands for less than the purchase price range above and about the same as the only posted price target. Wells Fargo still has an Underweight rating on the stock. That rating appears to have been unchanged in two years. The share price was near $9 back then.

Red Robin Gourmet Burgers

• Buyer(s): two beneficial owners
• Total shares: around 1.6 million
• Price per share: $5.19
• Total cost: about $8.3 million

Shares of Red Robin Gourmet Burgers Inc. (NASDAQ: RRGB) sank to an all-time low below $3 a share back in September after a quarterly report but have recovered somewhat since. The most recent report included revenue that exceeded expectations. The share price was last seen up less than a dollar from the purchase price above. The consensus recommendation is to buy shares, and analysts anticipate 53% or so upside in the coming year to their mean price target of $8.88. Note that the two buyers also acquired shares of the restaurant operator back in October and November as well.

Psychemedics

• Buyer(s): a director
• Total shares: around 1.4 million
• Price per share: $2.35
• Total cost: over $3.3 million

This purchase followed the announcement that the board of directors at Psychemedics Corp. (NASDAQ: PMD), a pioneer and industry leader in hair testing for drugs, had approved 1-for-5,000 reverse stock split of its common stock followed immediately by a 5,000-for-1 forward stock split. Holders with fewer than 5,000 shares no longer had a stake following these splits. After the purchase, this director has a stake of more than 1.8 million shares, making him a beneficial owner. The stock has no analyst coverage to speak of and therefore no consensus price target.

Biglari Holdings

• Buyer(s): CEO Sardar Biglari
• Total shares: less than 8,500
• Price per share: $203.89 to $225.00
• Total cost: nearly $2.6 million

San Antonio-based Biglari Holdings Inc. (NYSE: BH) is a conglomerate with restaurant, insurance, oil and gas, and other operations. The stock has soared about 30% since the company released its most recent quarterly results last month. It is up more than 56% in the past year, while the S&P 500 is over 33% higher in that time. Shares were last seen changing hands for more than the above purchase range. Biglari, who is also a beneficial owner, regularly buys shares, and his stake was last seen at over 1.3 million shares.

Liberty Latin America

• Buyer(s): a director
• Total shares: less than 199,600
• Price per share: $6.68 to $7.15
• Total cost: almost $1.4 million

Liberty Latin America Ltd. (NASDAQ: LILA) stock has retreated 31% or so since its earnings report last month, wiping out the year-to-date gains. The share price was last seen still within the purchase price range above. This telecom is a Warren Buffett pick, and analysts on average feel the share price has more than 53% upside in the coming year to $10.50. Just two of the five analysts who follow the stock recommend buying shares, which has not changed in the past three months. The director’s latest purchases pushed his stake to more than 1.9 million shares.

And Other Insider Buying

In the past two weeks, some insider buying was reported at Advance Auto Parts, AIG, American Homes 4 Rent, Archer Aviation, Brunswick, Caterpillar, Coherent, CVR Partners, Dick’s Sporting Goods, Dorchester Minerals, FS KKR Capital, Maximus, Newmont, Synovus, Valvoline, and Walmart as well.

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