- Insider buying can be an encouraging signal for potential investors.
- A couple of leading retailers saw insiders scooping up shares this past week.
- And some insider buys were made on the back of disappointing earnings reports.
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. So insider buying can be an encouraging signal for potential investors, particularly during periods of uncertainty.
The following is a look at a few notable insider purchases reported in the past week.
Revlon Inc (NYSE: REV) saw a director return to the buy window again last week. At $19.05 to $21.59 apiece, the 180,000 shares acquired via trust totaled nearly $3.7 million. That brought their stake up to more than 46 million shares, which compares with more than 56 million shares listed as outstanding.
The beauty and personal care products maker recently posted disappointing earnings and warned of material weakness in its reporting. Its shares ended Friday more than 5 percent higher for the week at $21.24 apiece, which was within the director's latest purchase price range.
The consensus price target is $18, but the shares traded above $29 as recently as last November.
Midweek, a Walgreens Boots Alliance Inc (NASDAQ: WBA) chief operating officer picked up 18,000 shares of this specialty retailer. At prices that ranged from $54.53 to $54.58 per share, that cost the director more than $982,000, and it brought their stake to almost 1.72 million shares.
This pharmacy operator's disappointing quarterly results and guidance last week prompted lower analyst price targets and sent shares to a multiyear low. The stock ended the week at $54.69 per share, above the purchase price range noted above.
While the consensus target was last seen at $67.62, the stock has traded as high as $86.31 in the past 52 weeks.
A Costco Wholesale Corporation (NASDAQ: COST) director acquired 3,000 shares of this Issaquah, Washington-based retailer on April Fool's Day. At an average of $242.645 a share, last week's transaction totaled less than $728,000. Note that other insiders sold $6.93 million worth of the stock in mid-March.
Costco has been seen as somewhat Amazon-proof, and shares have been on a tear this year, up more than 18 percent in the first quarter, while the S&P 500 has risen around 14 percent. The stock closed most recently at $245.87, translating to a bit of a pop for that director.
Shares have traded between $182.17 and $247.09 in the past 52 weeks; the share price has overrun the consensus estimate of $243.50.
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