After a period of trimming stakes, Warren Buffett’s Berkshire Hathaway ended the year making some sizable insider purchases. Building one of those stakes continued into the new year. Meanwhile, other insiders returned to add to stakes as well in a telecom and a boat maker. A biotech company also saw some action in the past week. 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.
The next earnings-reporting season has not yet begun, 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.
Verisign
A new year’s purchase by Warren Buffett.
- Buyer(s): 10% owner Berkshire Hathaway
- Total shares: more than 96,500
- Price per share: $201.12 to $206.11
- Total cost: almost $19.7 million
Berkshire Hathaway began scooping up Verisign Inc. (NASDAQ: VRSN | VRSN Price Prediction) shares in mid-December, and its stake is up to nearly 13.3 million shares. The Virginia-based tech company’s stock is up more than 5% since Buffett started buying, outperforming the Nasdaq. It is 4% or so higher than a year ago, and shares were last seen trading within the price range above. Three of four analysts who cover the stock recommend buying shares, and their mean price target has risen to $219.78. Note that an officer sold some shares early last month. And look for the fourth-quarter and 2024 report on February 6.
Zymeworks BC
Big expectations from analysts and insiders.
- Buyer(s): 10% owner EcoR1 Capital
- Total shares: more than 363,300
- Price per share: $14.56 to $14.78
- Total cost: over $5.3 million
Delaware-based Zymeworks BC Inc. (NASDAQ: ZYME) is focused on the discovery, development, and commercialization of novel, multifunctional biotherapeutics. It received an FDA nod for a cancer treatment in November. The share price is only marginally higher since then but was last seen above the buyer’s purchase price range. The stock has far outperformed the S&P 500 in the past six months. The $20.44 consensus price target indicates that analysts see more than 36% further upside in the next 12 months. All but two of the eight analysts covering the stock recommend buying shares. Note that the same buyer also acquired almost $2 million worth of shares around Christmastime.
Globalstar
Repeat insider buying at this telecom.
- Buyer(s): a director
- Total shares: 1.5 million
- Price per share: $1.98 to $2.23
- Total cost: almost $3.2 million
This satellite services provider posted record revenue for 2023 and selected a new chief executive officer last year. It outlined its growth strategy and financial outlook last month. Globalstar Inc. (NYSE: GSAT) shares were trading near the top of the purchase price above and are more than 8% higher than a year ago. However, it has underperformed the Dow Jones industrial average in that time. The consensus recommendation is to buy shares, and the analysts’ mean price target is about 57% higher than the current share price. Note that the buyer has been boosting his stake since mid-December. It is up to more than 12.3 million shares, which makes the director a beneficial owner.
Mastercraft Boat
Another buyer comes back for more.
- Buyer(s): 10% owner Coliseum Capital Management
- Total shares: almost 190,000
- Price per share: $7.99 to $19.05
- Total cost: more than $3.5 million
This beneficial owner returned to the buy window after a buying spree last spring and summer. Tennessee-based recreational boat maker Mastercraft Boat Holdings Inc. (NASDAQ: MCFT) recently announced an exclusive partnership with General Motors, naming the Chevrolet Silverado as its “Official Truck & Tow Vehicle” for 2025. Compared to a year ago, the stock is down over 15%, though the share price was last seen within the purchase price range above. The $23.00 consensus price target is less than the 52-week high, but it is about 26% higher than the current share price. Analysts on average recommend buying shares. The buyer’s stake is up to more than 3.5 million shares.
And Other Insider Buying
Some smaller insider buys at AIG, Nike, T-Mobile and more.
In the past week, some insider buying was reported at AIG, Biohaven, Chemed, CME, Nike, PBF Energy, Re/Max, Simon Property, Texas Pacific Land Trust, and T-Mobile as well.
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