Much attention has been paid lately to the fact that Warren Buffett has been trimming stakes and building a cash hoard. So it was a bit of a surprise to see three huge insider purchases from Berkshire Hathaway late last week. These include Buffett’s favorite oil and media stocks. Some other energy, tech, and media stocks saw some notable insider buying as well. Let’s take a quick look at these transactions.
24/7 Wall St. Key Points:
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Warren Buffett, who notably has been a seller lately, made three huge purchases last week.
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Other notable insider purchases also included energy, tech, and media companies, as well as a biotech.
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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 week, starting with the largest and most prominent.
Occidental Petroleum
- Buyer(s): 10% owner Berkshire Hathaway
- Total shares: nearly8.9 million
- Price per share: $45.17 to $47.00
- Total cost: more than $408.2 million
After scooping up a lot of shares last summer, Buffett returned to further bolster the Occidental Petroleum Corp. (NYSE: OXY) stake to almost 265.2 million shares, or about 28%. The Houston-based company crushed third-quarter expectations last month. Yet the shares are down around 4% since the report, though they were last seen trading above just Buffett’s latest purchase price range. The share price is about 26% lower than a year ago. The $62.14 consensus price target suggests over 36% upside potential in the next 12 months. Analysts on average have a Hold rating on the stock.
Sirius XM
- Buyer(s): 10% owner Berkshire Hathaway
- Total shares: more than 4.9 million
- Price per share: $20.47 to $22.55
- Total cost: over $107.2 million
Berkshire Hathaway was acquiring Sirius XM Holdings Inc. (NASDAQ: SIRI) shares back in October and has returned to add more to its stake. That is up to almost 1175 million shares. The company recently completed its spin-off from Liberty Media, and it has hiked its dividend. The stock retreated lately after a disappointing revenue outlook and is now down more than 58% year over year. Shares were last seen trading within the above price range. The $25.54 consensus price target signals almost 22% upside in the coming year. Yet, for now, only three out of 14 analysts recommend buying shares.
Verisign
- Buyer(s): 10% owner Berkshire Hathaway
- Total shares: more than 234,300
- Price per share: $191.12 to $196.23
- Total cost: around $45.4 million
Berkshire Hathaway boosted its Verisign Inc. (NASDAQ: VRSN) stake last week as well, to around 13.0 million shares. Shares of the Virginia-based tech company are up almost 4% since the most recent quarterly report. However, the stock is down around 3% since a year ago, though shares are trading a little above Buffett’s price range. Three of four analysts who cover the stock recommend buying shares, and the mean price target is up at $212.78. Note that an officer sold some shares earlier this month.
TKO
- Buyer(s): 10% owner Silver Lake West HoldCo
- Total shares: 526,400
- Price per share: $142.51 to $148.50
- Total cost: around $77.4 million
TKO Group Holdings Inc. (NYSE: TKO) is the parent of Ultimate Fighting Championship and World Wrestling Entertainment. There has been speculation that UFC programming could end up on Netflix, and UFC recently named an AI partner. Since last month’s third-quarter report, the stock is up more than 20% and trading near a multiyear high. The consensus price target is just $148.75, and all but three out of 16 analysts recommend buying shares, three of them with Strong Buy ratings. Note that Dwayne “The Rock” Johnson is on the board of directors.
Bicycle Therapeutics
- Buyer(s): 10% owner Barker Bros. Advisors
- Total shares: almost 1.5 million
- Price per share: $13.32 to $15.49
- Total cost: more than $21.1 billion
This U.K.-based clinical-stage biopharmaceutical company Bicycle Therapeutics PLC (NASDAQ: BCYC) recently expanded its Clinical Advisory Board. Since its third-quarter earnings report, shares have pulled back more than 37%. Much of that decline followed the recent release of clinical data. The share price fell to a 52-week low of $12.17 recently, but shares were last seen trading within the purchase price above. Analysts now see plenty of room to run, as their consensus price target is up at $33.36 per share. Ten of the 13 analysts who follow the stock recommend buying shares, five of them with Strong Buy ratings.
Nerdy
- Buyer(s): CEO Charles Cohn
- Total shares: 5.3 million
- Price per share: $1.51 to $2.05
- Total cost: more than $9.5 million
St. Louis-based Nerdy Inc. (NYSE: NRDY) operates a platform for live online learning and has a mission to transform the way people learn through technology. Its stock plunged about 50% to a post-IPO low of $0.72 a share after its second-quarter report was released in August. Shares have recovered to above $1 apiece (the New York Stock Exchange’s minimum share price requirement) but are still down more than 45% year 0ver year. Wall Street has a mean price target of $1.92, which signals almost 19% upside potential in the next 52 weeks. That is well below the all-time high above $12 a share. The consensus recommendation is to hold shares. Note that another officer sold some shares at about the same time.
Mach Natural Resources
- Buyer(s): a director
- Total shares: more than 562.700
- Price per share: $14.98 to $15.75
- Total cost: around $8.7 million
Anadarko Basin-focused independent upstream oil and gas company Mach Natural Resources L.P. (NYSE: MNR) recently completed two acquisitions and raised $129 million in a public offering. The share price is marginally higher than a year ago, despite a retreat following the announcement of the offering. Shares were last seen still within the purchase price range above. The $22.80 consensus price target indicates that analysts see nearly 50% in the next 52 weeks. All five analysts who cover the stock recommend buying shares. Note that this same director also scooped up about $5 million worth of shares in the prior week.
And Other Insider Buying
In the past week, some insider buying was reported at Antero Midstream, Centene, Church & Dwight, ConocoPhillips, Dave & Buster’s, Diamondback Energy, Dow, Globalstar, Healthcare Realty Trust, HF Sinclair, LyondellBasell, Matador Resources, Norfolk Southern, SoFi Technologies, Tidewater, and Uber as well.
Buffett Is Selling, and That’s Bad for Investors. But He’s Also Buying These 3 Stocks.
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