- Insider buying can be an encouraging signal for potential investors.
- Insiders were purchasing shares that appeared to have bottomed recently.
- A recently appointed CEOs continued building a stake this past week as well.
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 a few notable insider purchases reported in the past week.
Activision Blizzard, Inc. (NASDAQ: ATVI) saw a director step up to the buy window week. At $42.87 to $43.03 apiece, the 100,000 shares acquired cost that director over $4.29 million. That brought his stake up to less than 110,000 shares, which compares with around 765 million shares outstanding.
Despite the wild popularity of "Fortnite" from Epic Games, Activision's "Call of Duty" franchise remains popular with pro gamers. Its shares climbed more than 3 percent last week and ended at $44.63, so the director's purchases seem to be well timed. While the consensus price target is up at $52.78, the shares traded above $84 last October.
Pursuant to a Rule 10b5-1 trading plan, recently appointed Chief Executive Officer John Plant scooped up an additional 70,000 Arconic Inc (NYSE: ARNC) shares last week. At between $18.24 and $18.94 apiece, that totaled more than $1.31 million. Note that he also bought 140,000 shares in the previous week.
This lightweight metals engineering and manufacturing company chopped its dividend and boosted its share buyback plan in February. Shares closed Friday at $18.99, just above the latest purchase price range. The stock has traded between $15.63 and $24.55 in the past 52 weeks, and analysts currently estimate the price will go as high as $21.63.=
In the past week, CVS Health Corp (NYSE: CVS) saw two of its directors building up their stakes. At prices that ranged from $53.17 and $53.61 per share, the 11,900 shares acquired altogether totaled over $636,600. Note that two different directors purchased 11,600 shares in the previous week.
This pharmacy and health care company received a big analyst upgrade this past week. The stock was last seen trading at $55.60 per share, so here too the buys appear to be fortunately timed. The consensus target was at $78.19 on last look, but note that the stock briefly traded above $82 a share back in November.
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