Insider buying can be an encouraging signal for potential investors.
A couple of insiders took advantage of buy windows opening after earnings.
One of those insider purchasers was a board chair and CEO.
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 two notable insider purchases reported in the past week.
Air Products & Chemicals, Inc. (NYSE: APD) CEO Seifi Ghasemi, who is also board chair and president, stepped up to the buy window in the wake of a quarterly report. At $226.66 to $228.40 each, the 20,000 shares acquired totaled more than $4.54 million. Note that another insider sold fewer than 3,000 shares back in May.
This industrial gases supplier is a dividend aristocrat; that is, it has hiked its dividend annually for more than 25 years. Its shares ended the final full week of July more than 2% higher, better than the rise in the S&P 500 in that time.
The stock closed most recently at $230.55, above the CEO's purchase price range. Note that shares have traded as high as $231.45 in the past 52 weeks, but the analysts' consensus price target is just $226.53.
A director at Crown Castle International Corporation (NYSE: CCI) purchased 16,300 shares of this cell tower company last week. At prices ranging from $127.22 to $127.48 per share, that cost more than $2.07 million. Note that some of the shares are held in trust for family members.
The company recently posted better-than-expected earnings but soft site rental sales. The stock ended the past week at $130.58 per share, which is higher than the director's purchase range. While the consensus analyst target was last seen at $131.83, the stock has traded as high as $137.85 in the past 12 months.
At the time of this writing, the author had no position in the mentioned equities.
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