Insider buying can be an encouraging signal for potential investors.
Two building materials suppliers saw notable insider buying this past week.
A chairman returned to add more shares to his stake 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. So insider buying can be an encouraging signal for potential investors, particularly with markets near all-time highs.
The following are a few notable insider purchases reported in the past week.
Beacon Roofing Supply, Inc. (NASDAQ: BECN) saw beneficial owner CD&R Investment Associates IX buying some shares again last week. At about $32.08 each, the more than 3.2 million shares reportedly acquired totaled over $102.88 million. That brought this stake to more than 13.75 million shares.
JPMorgan downgraded Beacon Roofing Supply this past week. Its shares were trading at $33.38 each on last look, so the above purchase seems to be well-timed. The stock has changed hands as high as $40 a share in the past year, but the consensus analyst price target is $35.09.
A director at HD Supply Holdings Inc (NASDAQ: HDS) indirectly purchased 600,000 shares of this industrial distributor. At $38.36 to $38.79 a share, that cost this director and activist investor about $23.13 million. It also came after the company announced its intention to split into two independent publicly traded companies.
HD Supply also saw a couple of analyst downgrades last week. The stock was last seen trading at $38.72 a share in a 52-week range of $35.35 to $47.13. The consensus analyst price target was $45.92 on last look, and their consensus recommendation is to hold shares.
Scientific Games Corp (NASDAQ: SGMS) board chair Ronald Perelman stepped up to the buy window again.
He picked up 100,000 shares of this maker of slot machines and other gaming products at $20.47 to $20.98 apiece last week. The transaction totaled more than $2.08 million, and if followed 200,000 shares Perelman purchased in the previous week.
Last week, the company announced a deal to supply lottery terminals in Italy. The stock closed most recently at $20.81, which is within the purchase price range above. Shares have traded as high as $29.95 in the past 52 weeks, but analysts currently anticipate the price will go to $29.44.
See also: Insider Buying Vs. Insider Selling: What Numbers Really Matter For Traders?
At the time of this writing, the author had no position in the mentioned equities.
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