Insider buying can be an encouraging signal for potential investors.
A board chair stepped up to the buy window in the past week while shares were trading down.
A celebrity join an insider in increasing their stake in a financial giant.
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 still not that far off all-time highs.
DISH Network Corp (NASDAQ: DISH) board chair Charles Ergen purchased about 500,000 shares of this pay TV provider throughout last week. At $30.94 to $31.79 a share, the transactions totaled more than $15.72 million. The stake was last reported to be up to more than 1.85 million shares.
Dish posted disappointing quarterly results at the end of July, but this insider purchase helped buoy the shares. They ended the week trading at $32.39 each, above the purchase price range mentioned above. They have traded as high as $44.66 in the past 52 weeks, but the consensus price target was last seen at $47.28.
Last week, a Netflix, Inc. (NASDAQ: NFLX) director acquired about 6,500 shares of this video streaming leader. At prices ranging from $306.63 to $310.98 per share, those transactions totaled more than $2 million. Note that these buys were made pursuant to a Rule 10b5-1(c) trading plan.
Analyst opinions vary on the significance of Netflix's recently announced shortfall in subscriber additions. Shares have slipped in the past month and ended the past week trading at $308.93. The consensus target is $388.40, though the stock has traded as high as $386.80 in the past 52 weeks.
JPMorgan Chase & Co. (NYSE: JPM) saw a director step up to the buy window as more central banks cut interest rates. At $109.91 each, the 18,200 shares acquired via trust totaled around $2 million. Note that other insiders sold more than 24,000 shares altogether back in July.
Barron's reported that "Star Wars" creator George Lucas has purchased JPMorgan shares as well. The stock ended the first full week of August more than 2% lower, closing most recently at $109.74, just below the director's purchase price. The analysts' consensus price target was last seen at $121.27.
At the time of this writing, the author had no position in the mentioned equities.
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