Bargain Hunters Take Note: Insider Cluster-Buying At ECYT
By Market News Video Staff, Monday, December 19, 10:50 AM ET 0
A particularly strong insider buying signal is what we call a "cluster-buy" where three or more different insiders make open market purchases within a short period of one another. At Endocyte Inc (NASDAQ:ECYT), 3 different insiders purchased 146,000 shares at an average price of $3.35/share, for a total of $488,606, with the most recent purchase on December 16, 2011.
Presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money. So when multiple insiders all decide to make purchases around the same time, it could be a strong indication that the stock is undervalued. Below is a table summarizing the insider buys that make up this "cluster":
Purchased Insider Title Shares Price/Share Value 12/16/2011 Philip S. Low Chief Science Officer 1,000 $3.21 $3,206.00 12/16/2011 John C. Aplin Director 20,000 $3.27 $65,400.00 12/16/2011 Douglas G. Bailey Director 125,000 $3.36 $420,000.00
The chart below shows the one year performance of ECYT shares, versus its 200 day moving average. Note that ECYT's low point in its 52 week range is $3.02 per share, with $14.80 as the 52 week high point —that compares with a last trade of $3.15, with shares currently trading