- Insider buying can be an encouraging signal for potential investors.
- A pair of CEOs stepped up while insider buying was slow overall.
- Some insiders took advantage of a public offering of shares as well.
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 couple of notable insider purchases reported in the past week, but also note that an insider bought some FedEx Corporation (NYSE: FDX) shares while others were exercising options and selling.
Healthequity Inc (NASDAQ: HQY) CEO Jon Kessler, founder Stephen Neeleman and two other directors took advantage of a public offering of shares. At $61.00 apiece, the 40,000 shares acquired altogether totaled $2.44 million. Note that two other insiders exercised options on almost 16,000 shares of this health savings accounts custodian as well.
HealthEquity recently announced the acquisition of Wageworks, a health care benefits administrator. HealthEquity's shares ended the third week of July more than 11% higher, while the S&P 500 retreated marginally. The stock closed most recently at $79.18, well above the offering purchase price. Note that shares have traded as high as $101.58 in the past 52 weeks, but the analysts' consensus price target is $89.20.
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The CEO of DXC Technology Co (NYSE: DXC), John Lawrie, stepped up and purchased more than 4,100 shares of this IT services provider last week. At prices ranging from $55.62 to $56.69 per share, that cost him more than $234,000. Note that these purchases were made pursuant to a 10b5-1 Plan and brought his stake up to almost 898,000 shares.
The company recently announced the expansion of its strategic partnership with Microsoft. The stock ended the past week at $55.93 per share, just a little higher than this chief executive's purchase range. While the consensus analyst target was last seen at $73.00, the stock has traded as high as $96.75 in the past 12 months.
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