Insider buying can be an encouraging signal for potential investors.
An executive board chair bought shares after others sold.
The CEO of an apparel maker returned to the buy window last week.
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.
Below is a look at two notable insider purchases reported in the past week:
Sinclair Broadcast Group Inc (NASDAQ: SBGI) saw Executive Chair David Smith purchase shares midweek. At $55.10 apiece, the more than 395,000 shares acquired via trust totaled over $21.76 million. Note that the company's chief operating officer and a director sold 5,000 shares altogether in the final weeks of June as well.
Sinclair posted preliminary revenue numbers and announced an agreement with Charter Communications Inc (NASDAQ: CHTR) last week. The shares ended the second week of July more than 3% higher, while the S&P 500 gained a little more than 1%. The stock closed most recently at $59.05, well above the director's purchase price. Note that shares have traded as high as $66.57 in the past 52 weeks, and the consensus analyst price target is $74.50.
G-III Apparel Group, Ltd. (NASDAQ: GIII) CEO Morris Goldfarb has stepped up again and purchased 40,000 shares of this designer and distributor. At prices ranging from $26.24 to $26.55 per share, that cost him almost $1.06 million. Note that Goldfarb also bought more than 40,000 shares in June, when the price was under $26 per share.
The company posted mixed quarterly results and named a new board member in June. The stock ended the past week at $28.40 per share, so this chief executive's purchase seems well-timed. While the consensus analyst target was last seen at $38.11, the stock has traded as high as $50.83 in the past 52 weeks.
At the time of this writing, the author had no position in the mentioned equities.
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