- Insider buying can be an encouraging signal for potential investors.
- Some insiders have made notable share purchases in the wake of earnings reports.
- That includes a financial services CEO and an energy infrastructure executive chair.
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.
Biogen Inc (NASDAQ: BIIB) saw a director step up to the buy window late last week. At per-share prices that ranged from $324.86 to $330.52, the 42,800 shares reportedly acquired cost him around $20.57 million. That brought the director's stake to almost 525,000 shares, while more than 210 million shares were listed as outstanding.
Biogen posted better-than-expected quarterly results last week. The stock ended at $330.91 per share, which was above the director's listed purchase price range. The shares have traded as high as $388.67 in the past year, and the consensus price target was at $385.96 on last look.
The Kinder Morgan Inc (NYSE: KMI) executive chair of the board, Richard Kinder, purchased more than 215,000 shares of this Houston-based energy infrastructure giant. At prices that ranged from $17.90 to $18.10 a share, last week's transactions totaled more than $3.87 million.
Kinder Morgan posted its quarterly numbers earlier in January, and shares have been on the rise since and closed Friday at $18.35. That is above Kinder's purchase price range. While the stock has traded in a range of $14.62 to $18.67 in the past 52 weeks, analysts on average anticipate that the price will go as high as $21.22.
Discover Financial Services
CEO Roger Hochschild added to his Discover Financial Services (NYSE: DFS) stake last week as well. The 30,000 shares purchased, at an average of $66.67 apiece, totaled around $2 million. That brought the stake to almost 835,000 shares, some of which are held in trust for the benefit of his spouse and children.
The banking and payment services company also recently reported its latest quarterly results. Shares last closed at $68.40, so the timing of the purchase appears fortunate. The stock has changed hands as high as $81.34 a share in the past year. The consensus price target is $79.30.
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