- Insider buying can be an encouraging signal for potential investors.
- Insiders at a natural gas producer and at a real estate investment trust made notable buys this past week.
- Also a leading candy maker bought the outstanding shares of a buyout target.
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 it can be an encouraging signal for potential investors, particularly in an overpriced market or after disappointing news
Here's a look at some notable insider purchases reported in the past week.
Amplify Snack Brands Inc (NYSE: BETR) saw beneficial owner Hershey scoop up nearly 76.74 million shares of this snack food maker at $12 apiece for a total of more than $920 million. Hershey bought the outstanding shares of Amplify as part of an effort to expand its offerings beyond chocolate.
Hershey Co (NYSE: HSY) also posted last week. Amplify shares traded near $7 before the merger was announced in December. Hershey shares are down about 11 percent to less than $103 since the announcement.
Biglari Holdings Inc (NYSE: BH) founder and CEO Sardar Biglari has acquired more than 3,500 additional shares of this restaurant chain operator. At between $414.64 and $417.31 per share, the move cost him more than $1.47 million. Note that Biglari is a frequent buyer of small batches of shares, and his stake is most recently listed as more than 702,000 shares.
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 most recently at $404 after sliding this past week along with the broader markets.
One Range Resources Corp. (NYSE: RRC) director purchased 34,000 shares of this Fort Worth-based independent natural gas company at $14.72 apiece. The transaction totaled more than $500,000, and it also brought his stake to more than 61,200 shares.
A fourth-quarter update and 2018 guidance resulted in a downgrade of Range Resources by Raymond James last week. The stock retreated more than 11 percent this past week to end trading at $13.55 a share on Friday. The year-to-date decline in the share price is more than 24 percent.
At SL Green Realty Corp (NASDAQ: SLG), CEO Marc Holliday has acquired 7,880 shares of the real estate investment trust. At a per-share price of $25.20, a significant discount to the recent price per share, the value of that transaction was more than $198,000. Note that Holliday also sold $160,000 shares back in December.
Before this latest transaction, Stifel upgraded the stock, calling the valuation at New York's largest owner of commercial real estate "simply too attractive to ignore." Last week, the shares rose more than 3 percent but then gave up that gain and closed on Friday at $98.66 apiece. The stock now is down more than 2 percent since the beginning of the year.
At the time of this writing, the author had no position in the mentioned equities.
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