Insider buying can be an encouraging signal for potential investors.
Board chairs at pharmaceutical companies made notable buys this week.
An airline CEO led by example in acquiring company shares.
Conventional wisdom says that insiders and 10-percent 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.
Below is a look at a few notable insider purchases reported in the past week, but also note that insiders at Freeport-McMoRan Inc (NYSE: FCX) and Revlon Inc (NYSE: REV) made some noteworthy buys as well.
MGM Resorts International (NYSE: MGM) saw a director making indirect share purchases this past week. At $25.37 to $26.66 each, the more than 2.87 million shares acquired totaled over $75.24 million. Note that these purchases were pursuant to a Rule 10b5-1 trading plan. That director's stake was last listed as more than 18.56 million shares.
Concerns over trade tensions between the United States and China have weighed on casino stocks recently. Yet, this stock rose about 3 percent in the past week, a bit better than the gain in the S&P 500, and shares closed most recently at $26.28, still within the director's purchase price range. Note that shares have traded as high as $32.13 in the past 52 weeks, and the analysts' consensus price target is $33.44.
Immunomedics, Inc. (NASDAQ: IMMU) saw its executive board chair Behzad Aghazadeh indirectly purchase more than 1.53 million more shares of this biopharmaceutical company. At prices ranging from $11.97 to $12.47 per share, that cost him more than $18.74 million. Note that Aghazadeh also acquired 750,000 shares back in May. With a stake now of 20 million shares, he is a beneficial owner.
The Immunomedics chief medical officer stepped down earlier this year, and the company recently posted disappointing earnings results. As the stock ended Friday at $12.93 per share, after rising around 6 percent in the past week, the above purchases seem to be well-timed. The consensus target was last seen at just $25.70, but the stock has traded as high as $27.33 in the past 52 weeks.
Last week, the American Airlines Group Inc (NASDAQ: AAL) CEO Doug Parker and several other executives and insiders acquired 100,000 shares altogether of this transportation company. At prices ranging from $27.61 to $28.65 per share, those transactions totaled nearly $3.09 million. Parker's stake was posted as more than 2.2 million shares.
American Airlines is reportedly partnering with Qantas to provide nonstop service to Australia. Its shares ended the past week trading at $30.92, after rising more than 7 percent for the week. Friday's closing price was well above the purchase price range noted above. The consensus target is $42.22, though the stock has traded as high as $44.93 in the past 52 weeks. Note that it is still down more than 3 percent year to date.
Teva Pharmaceutical Industries Ltd (NYSE: TEVA) saw its board chair Dr. Sol Barer scoop up 215,500 shares of this generic medicine maker last week at $8.91 to $9.63 each. The transactions totaled around $2 million. Note that these purchases were made with shares near a multiyear low due to opioid and price-fixing concerns. Barer's stake was up to less than 221,000 shares.
An Oppenheimer analyst upgraded the stock early last week despite the ongoing concerns. The stock rose about 5 percent but then ended the week only around 1 percent higher.
The most recent close of $9.26 is within the above-mentioned purchase price range. Note that shares have traded as high as $25.96 in the past 52 weeks, though the analysts' consensus price target was down at $18.67.
At the time of this writing, the author had no position in the mentioned equities.
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