- Insider buying can be an encouraging signal for potential investors.
- A Luxembourger conglomerate has increased its stake in a beauty products giant.
- Also an insider at a big U.S. bank took advantage of recent volatility.
Conventional wisdom says that insiders and 10 percent 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 during periods of uncertainty.
Here's a look at some notable insider purchases reported in the past week.
Coty Inc (NYSE: COTY) saw beneficial owner JAB Cosmetics acquire 3.1 million more shares. At per-share prices between $19.99 and $21.34, the value of those transactions totaled more than $84.4 million. JAB Holdings is a Luxembourg-based conglomerate that also has stakes in Peet's Coffee, Krispy Kreme, Keurig and others. The Coty stake is now more than 290 million shares.
Beauty products company Coty reported better-than-expected quarterly results earlier this month, and the stock hit a new 52-week high of $21.64 last week. Shares ended Friday at $21.45, which is still near the upper end of that range of those latest purchase prices. The stock is marginally higher year to date.
Gaming And Leisure
Gaming and Leisure Properties Inc (NYSE: GLPI) saw the chairman/CEO and the chief financial officer together scoop up 125,000 shares of this company. At prices ranging from $33.00 to $33.33 a share, those transactions totaled more than $4.1 million. Chief Executive Peter Carlino now has a stake of more than 4.3 million shares. The company has more than 210 million shares outstanding.
In the previous week, this gaming-focused real estate investment trust reported quarterly results that fell short of Wall Street expectations. Shares closed Friday at $33.77, up modestly from the purchase prices. Despite a marginal gain this past week, the stock is still down more than 7 percent year to date.
The Biglari Holdings Inc (NYSE: BH) founder and CEO, Sardar Biglari, acquired more than 3,600 additional shares of this restaurant chain operator. At between $396.17 and $408.44 per share, that cost more than $1.4 million. Note that these transactions were effected pursuant to a Rule 10b5-1 trading plan.
The owner of Steak 'n Shake and Maxim magazine recently announced plans to reorganize itself as a holding company with a dual class structure, with the aim of preserving Biglari's control of the company. The stock closed Friday at $391.62 after retreating more than 3 percent this past week. The S&P 500 rose about 3 percent in that time.
A Wells Fargo & Co (NYSE: WFC) director took advantage of the recent volatility to acquire 9,000 shares of San Francisco-based financial giant. At an average of $55.98 per share, that cost him more than $503,000. Note that the transaction effectively doubled that director's stake.
Berkshire Hathaway's Charlie Munger had positive words for the bank last week. Wells Fargo shares closed most recently at $59.95, after climbing more than 6 percent this past week. The stock is still down year to date, however.
CNX Resources Corp (NYSE: CNX) had two directors purchase more than 36,000 shares altogether of this independent oil and natural gas company. The purchase prices ranged from $12.71 to $12.99 per share, and the transactions totaled more than $467,000 combined. The shares acquired included deferred stock units, deferred shares and restricted stock units.
CNX is part of the former Consol Energy, which was broken up in November. Its shares ran more than 15 percent last week to end the week's trading at $14.76, so the directors' buys appear to be well timed. Year to date, though, the share price is still down about 2 percent.
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