- Insider buying can be an encouraging signal for potential investors.
- Some insiders made return trips to the buy window in the past week.
- Health care companies featured prominently in the week's insider purchases.
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.
Below is a look at a few notable insider purchases reported in the past week, but also note that beneficial owners of Beacon Roofing Supply, Inc. (NASDAQ: BECN) and Sunrun Inc (NASDAQ: RUN) made some sizable buys as well.
MGM Resorts International (NYSE: MGM) had a director continue to make indirect share purchases this past week. At $27.31 to $28.00 apiece, the more than 488,600 shares acquired most recently totaled almost $13.62 million. Note that these purchases were pursuant to a Rule 10b5-1 trading plan and continued a buying streak that began in early June.
MGM investors did not seem too concerned about the Caesars-Eldorado deal. MGM stock rose about 2% in the past week, while the S&P 500 was essentially flat. Shares closed most recently at $28.57, above the director's latest purchase price range. Note that shares have traded as high as $31.66 in the past 52 weeks, and the analysts' consensus price target is $33.09.
Immunomedics, Inc. (NASDAQ: IMMU) saw its executive board chair, Behzad Aghazadeh, step up again and indirectly purchase a million more shares of this biopharmaceutical company. At prices ranging from $13.21 to $13.84 per share, that cost him almost $13.55 million. Note that Aghazadeh also acquired shares earlier in the month and back in May. With a stake now of 21 million shares, he is a beneficial owner.
The Immunomedics chief medical officer stepped down earlier this year. Because the stock ended the past week at $13.87 per share, after rising more than 6% in the past week, the above purchases seem to be well-timed. The consensus target was last seen at just $25.30, but the stock has traded as high as $27.33 in the past 52 weeks.
Last week, two AbbVie Inc (NYSE: ABBV) directors and an executive acquired 49,400 shares altogether of this pharmaceutical company. At prices ranging from $67.30 to $67.50 per share, those transactions totaled more than $3.32 million. Note that the shares were changing hands at more than $78 apiece at the beginning of the week.
AbbVie announced its intention to acquire Ireland-domiciled pharma company Allergan plc (NYSE: AGN). AbbVie shares dropped sharply after the announcement but ended the past week trading at $72.72, so a nice quick pop for those insiders. The consensus target is $86.21, though the stock has traded as high as $100.23 in the past 52 weeks. Note that the shares still down around 21% year to date.
The Medicines Company (NASDAQ: MDCO) saw a director last week return to acquire indirectly an additional 50,000 shares of this biopharmaceutical company in a new public offering of common stock at $33.00 apiece. That transaction totaled $1.65 million. Note that this same director purchased 516,000 shares in late May. The director's stake was last seen at over 4.20 million shares.
Options traders were bullish on the stock early in June. Shares ended last week more than 8% higher and closed Friday at $36.47, so the timing of the director's latest purchase was fortunate. The shares have traded as high as $41.57 in the past 52 weeks, and the analysts' consensus price target is up to $57.36.
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