Insider buying can be an encouraging signal for potential investors, especially when markets are near all-time highs.
Some insiders were picking shares last week in the wake of earnings beats.
One oil exploration and production CEO returned to the buy window during the week too.
Conventional wisdom says that insiders and 10% owners really only buy shares of a company for one reason — they believe the stock price will rise and they want to profit from it. So insider buying can be an encouraging signal for potential investors, particularly when there is uncertainty in the markets or the markets are near all-time highs.
Note that with earnings-reporting season still in full swing, many insiders are prohibited from buying or selling shares. Here are a few of the most noteworthy insider purchases that were reported in the past week.
A director added some Colfax Corp (NYSE: CFX) shares after the industrial company posted better than expected earnings. Some 250,000 shares were purchased last week at prices ranging from $45.67 to $47.01 apiece. That cost that director more than $11.54 million. Note that the director also picked up 200 shares via trust for the benefit of that director’s child.
Colfax also recently announced a secondary offering of more than 6.5 million shares. The share price has risen about 7% since the announcement and quarterly report, closing at $48.05 on Friday. That was more than 2% above the high end of the director’s purchase price range. The stock has traded as high as $50.26 in the past year but has a $52.36 consensus price target.
Early last week, a co-lead independent director at Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) added to a stake after a better than expected earnings report. At $197.45 to $198.12 apiece, the 15,000 shares purchased cost that director almost $2.97 million, and they increased the director’s stake to more than 41,200 shares.
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The Boston-based biotech also named a new chief operating officer last week. The share price was at $200.67 as Friday’s regular trading ended. That was down fractionally for the past week but a bit higher than the high end of the director’s purchase price range. The stock has a $260.91 consensus price target, and analysts overall recommend buying shares.
Health insurance provider Bright Health Group Inc (NYSE: BHG) had a pair of directors acquire a combined 164,000 shares in the past week. At per-share purchase prices ranging from $8.59 to $8.98, that added up to more than $1.43 million. Jeffrey Immelt, one of those directors and former CEO of General Electric, saw his stake lifted to over a million shares by this purchase.
The Minneapolis-based company posted its second-quarter results last week, its first report since the recent initial public offering. The stock is down over 18% since the report, ending Friday at $8.92 a share, within the directors’ purchase price range. The IPO price was $18 a share, but the stock has traded at less than that since.
Magnolia Oil & Gas
Magnolia Oil & Gas Corp (NYSE: MGY) CEO Stephen Chazen returned to the buy window last week. At $13.70 to $14.45 per share, the 50,000 shares most recently acquired totaled more than $706,100. His stake was listed as more than 7.04 million shares, compared to a float of 161 million or so.
Early last week, the Houston-based company also posted an earnings beat and announced its first semi-annual interim dividend payment. The stock ended the week’s trading at $14.48, which is just above the top of the CEO’s purchase price range. It has traded in a wide range of $4.09 and $16.38 in the past 52 weeks.
Note that some smaller amount of insider buying at Caterpillar Inc. (NYSE: CAT), CVS Health Corp (NYSE: CVS), Delta Air Lines, Inc. (NYSE: DAL), DuPont de Nemours Inc (NYSE: DD) and Spirit Airlines Incorporated (NYSE: SAVE) was reported in the past week as well.
At the time of this writing, the author had no position in the mentioned equities.
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