- Insider buying can be an encouraging signal for potential investors.
- A couple of insiders made return trips to the buy window.
- Insider buying is subdued overall while earnings season is in full swing.
Conventional wisdom says that insiders and 10% 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 with markets near all-time highs and during periods of uncertainty.
Here are a couple of significant insider purchases reported last week. Also note that with earnings season in full swing, buy windows for many insiders are closed.
A 10% owner of PBF Energy Inc (NYSE: PBF) purchased 212,000 shares of this this New Jersey-based refiner last week. At $29.41 to $29.82 per share, that totaled more than $6.29 million. Note that the same insider bought more than 553,000 shares in the previous week for over $17 million.
In fact, that insider, an asset manager associated with tycoon Carlos Slim, also bought lots of shares back in December and November. The stock is down more than 16% since the beginning of November. However, the analysts' consensus target price suggests more the 43% upside from the most recent share price.
A Trinity Industries Inc (NYSE: TRN) director stepped up to the buy window again last week and picked up nearly 278,400 shares of this railcar maker at between $20.51 and $20.75 apiece. That cost him over $5.74 million. These purchases were made pursuant to a 10b5-1 plan and followed the purchase of more than 206,500 shares in the prior week.
This Dallas-based company recently named a former Caterpillar executive as its new chief executive. The stock is down about 6% year to date, while the S&P 500 has seen a marginal gain in that time. The current share price is more than the mean price target and, not surprisingly, analysts recommend holding the stock.
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