- Insider buying can be an encouraging signal for potential investors.
- Some health care related companies saw notable insider buys last week
- Some chief executive officers were stepping up to the buy window 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 with markets near all-time highs.
Here's a look at a few notable insider purchases reported in the past week, but note that the executive board chair at Kinder Morgan Inc (NYSE: KMI) also continued his buying streak last week.
Biogen Inc (NASDAQ: BIIB) CEO Michel Vounatsos and a director last week acquired a total of nearly 122,700 shares of this noted biotech company. At share prices ranging from $229.25 to $232.06, the transactions totaled around $28.22 million. Note that Vounatsos's latest stake was listed as just over 21,000 shares.
A competing therapy from a rival drugmaker has been getting some buzz lately. Biogen rose fractionally in the past week, as did the Nasdaq, and shares closed at $231.18, still in the above purchase price range. Note that shares have traded as high as $388.67 in the past 52 weeks, but the mean price target is $259.12.
A UnitedHealth Group Inc (NYSE: UNH) director picked up more than 6,400 shares of this Dow Jones industrials component. At an average of $233.209 per share, last week's transaction totaled about $1.50 million. Note that two other directors sold 12,500 shares altogether in the previous week.
Increasing talk about so-called Medicare for All may be a drag on UnitedHealth and its peers. The stock pulled back more than 2 percent in the past week and closed Friday at $231.95, below that director's purchase price. However, analysts anticipate the price will go to $288.04, above the 52-week high of $287.94.
Last week, the Archer Daniels Midland Co (NYSE: ADM) CEO, Juan Luciano, and its chief financial officer bought a total of 29,600 shares of this agricultural giant. At prices that ranged from $42.30 to $42.76 per share, that cost them more than $1.25 million. It also brought Luciano's stake to more than 569,100 shares.
AMD recently posted quarterly numbers that fell short of Wall Street expectations. But shares quickly recovered from the post-report retreat, and the stock ended the past week at $43.67 per share, above the purchase price range noted above. While the consensus target was last seen at $51.50, the stock has traded as high as $52.07 in the past 52 weeks.
Cerner Corporation (NYSE: CERN) saw two directors step up to the buy window last week. At share prices that ranged from $65.70 to $67.74, the 141,000 shares reportedly acquired cost them less than $1.11 million. Note that, for both of these directors, ownership of these shares is listed as indirect.
This healthcare-focused IT provider raised its earnings guidance and posted quarterly results in line with Wall Street expectations. Shares ended last week trading at $68.47 apiece, up more than 4 percent for the week. The stock hit a 52-week high of $69.34 on Friday, and the consensus price target was $69.97 on last look.
CEO Matthew Maloney scooped up more than 15,400 GrubHub Inc (NYSE: GRUB) shares via trust last week. At prices ranging from $63.22 to $66.41 apiece, that totaled just shy of $1.00 million. The CEO's stake was listed as more than 44,200 shares, while the total float is over 90 million.
The recent earnings report showed that this Chicago-based delivery services provider is still holding its own. Grubhub's share price ended Friday at $71.02, so the timing Maloney's purchase looks fortunate. Analysts currently estimate the price will go as high as $99.14, even though the 52-week high, seen last September, is $149.35.
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