Insider buying can be an encouraging signal for potential investors.
A red-hot cult stock saw a beneficial owner adding to its stake this week.
Some insiders were making purchases in the wake of earnings reports.
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. So insider buying can be an encouraging signal for potential investors, particularly during periods of uncertainty.
Insiders continued to add shares despite overall market volatility and global economic gloom. Here are some of the most noteworthy insider purchases reported in the past week.
A 10% owner of Peloton Interactive Inc (NASDAQ: PTON) added 150,000 shares of this fitness products provider to its stake. At a per-share price of $33.40, that totaled almost $5.01 million. This same beneficial owner also purchased 50,000 shares back in April.
Analysts are bullish on the stock, which ended last week's trading at $43 per share, so the above purchase seems well-timed. The share price is up more than 95% since Peloton's year-to-date low in March.
Univar Solutions Inc (NYSE: UNVR) saw its chief financial officer purchase 250,000 shares of this chemicals company last week at prices averaging $13.33 per share. That cost that executive more than $3.33 million and was pursuant to a Rule 10b5-1 stock trading plan established in February.
Univar recently named a new board chair and it is scheduled to post earnings this week. The stock ended last week at $15.05, well above the CFO's purchase price. Shares are up more than 72% from their year-to-date low in March.
The GEO Group Inc (NYSE: GEO) CEO George Zoley returned to the buy window in the wake of an earnings beat. He bought 250,000 shares at prices ranging from $11.09 to $11.50. That totaled almost $2.84 million. Note that 100,000 of those shares were acquired via trust for the benefit of his children.
Shares of this health care facilities-focused real estate investment trust closed most recently at $11.50. Also note that the stock traded above $18 a share before the pandemic panic-selling back in March.
Illinois Tool Works
Illinois Tool Works Inc. (NYSE: ITW) CEO Ernest Scott Santi and one other director shelled out $158.42 to $159.19 per share for more than 7,800 shares altogether of this industrial products maker. That cost them almost $1.25 million, and the transactions came in the wake of a mixed first-quarter report.
The latest close at $161.01 per share is above their purchase prices. The stock is up about 28% since its year-to-date low in March, while the S&P 500 is about 25% higher in that time.
In addition, note that there was some amount of insider buying at American International Group Inc (NYSE: AIG), Discover Financial Services (NYSE: DFS), TransDigm Group Incorporated (NYSE: TDG) and Wyndham Hotels & Resorts Inc (NYSE: WH) last week as well.
At the time of this writing, the author had no position in the mentioned equities.
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