- Insider buying can be an encouraging signal for potential investors.
- Some insiders have taken advantage of recent sell-offs.
- Shares of one of these companies sank to a 52-week low last week.
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.
Aramark Corporation (NYSE: ARMK) saw its board chair, president and chief executive, Eric Foss, add to his stake this past week. At per-share prices of $32.21 to $32.72, the more than 92,500 shares reportedly acquired cost him about $3.00 million. Another director also purchased 6,000 shares last week for a total of more than $196,300, at an average of $32.72 apiece.
Investors day guidance was blamed for a plunge in Aramark's share price last week. The stock ended the week at $32.08 per share, which was down more than 11 percent over that time. Shares have traded as high as $46.09 in the past year, and the consensus price target was at $43.69 on last look.
The Royal Caribbean Cruises Ltd (NYSE: RCL) board chair and CEO, Richard Fain, added 18,900 shares of this Miami-based company to his stake this past week. The share price for this purchase, via family trust, ranged from $105.290 to $105.75, and the transaction totaled more than $1.99 million.
The company launched a new ship and named a new director earlier this month. Shares closed Friday at $107.09, so the CEO's purchase appears to be well-timed. The stock hit a 52-week low of $97.48 at the end of October, but it's still well down from the multiyear high of $135.65 seen back in January. The consensus price target on the shares was last seen at $137.11.
A director of Valero Energy Corporation (NYSE: VLO) also stepped up to the buy window this past week. He picked up a total of 25,000 shares at about $72.74 apiece. That cost him almost $1.82 million. That director's stake was listed most recently as more than 53,700 shares.
This refiner has underperformed relative to its peers since October. But the stock was trading at $73.30 a share on last look, so this also looks like a well-timed buy. Shares were changing hands above $115 apiece just 90 days ago but sank to a 52-week low of $71.48 last week. Note that the 17 analysts polled have a consensus price target still up at $117.00.
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