- Insider buying can be an encouraging signal for potential investors, especially when markets face uncertainty.
- Insiders were taking advantage of secondary offerings as the new year settled in.
- Biotech companies are well represented on this list of insider share purchases.
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 from it. So insider buying can be an encouraging signal for potential investors, particularly when there is uncertainty in the markets, as there has been due to the pandemic resurgence and political issues.
Here are some of the most noteworthy insider purchases that were reported in the past week.
Clinical-stage biopharmaceutical company Fate Therapeutics Inc FATE had a 10% owner increase its stake at a time when the chief executive and other officers were selling shares. The more than 327,400 shares acquired, at a public offering price of $85.50 apiece, added up to nearly $28.00 million. That raised that owner's stake to more than 12.95 million shares, compared to a total float of more than 85 million. Shares closed most recently at $113.59.
Biotech company Aldeyra Therapeutics Inc ALDX saw a 10% owner recently add 1.05 million shares to their stake. At $7.49 to $10.43 per share, the transactions totaled more than $9.20 million. The stock closed most recently at $13.37, which is above the purchase price range. Note that this Lexington, Massachusetts-based company also announced a secondary offering of shares at $9.50 apiece.
A director acquired nearly 33,900 DermTech Inc DMTK shares last week at a secondary offering price of $29.50 apiece. In the prior week, a 10% owner bought 200,000 shares at the same price. All these purchases added up to about $6.90 million. This diagnostics company said its non-invasive genomic patch testing for melanoma had received a recommendation from the National Comprehensive Cancer Network. The stock popped more than 12% in the week's trading and closed Friday at $39.00.
Board Chair Bryant Riley took advantage of a public offering to pick up 100,000 more B. Riley Financial Inc RILY shares. Along with over 21,000 shares bought by other insiders, at $46.00 each, those transactions totaled more than $5.59 million. Riley's stake was up to about 4.95 million shares. Shares of this Los Angeles-based financial services provider closed most recently at $49.68 apiece.
Mersana Therapeutics Inc MRSN saw a director indirectly acquire 250,000 shares. Prices ranged from $17.79 per share to $18.93. The transactions totaled about $4.59 million and raised his stake in this biopharmaceutical company to over 3.69 million shares. News of this buying helped boost the stock, which closed trading most recently at $21.09 per share.
Two directors at Generation Bio Co GBIO took advantage of a secondary offering to purchase almost 24,500 shares of this gene therapy developer last week. At a share price of $24.50, that cost them shy of $600,000 altogether. Note that three officers sold more than 34,000 shares altogether last week, too. The share price rose about 15% during the week to close at $32.17 on Friday.
And the Conagra Brands Inc CAG board chair, Richard Lenny, acquired 10,000 shares of this Chicago-based packaged foods company. At prices ranging from $33.65 to $33.71 per share, that cost that him almost $337,000. This purchase came in the wake of a stronger than expected earnings report. The stock ended last week fractionally lower and was last seen trading at $33.86 a share.
Note that some smaller amount of insider buying was reported in the past week as well, at insurer Old Republic International Corporation ORI, specialty vehicle maker Rev Group Inc REVG, software company Sprout Social Inc SPT and utility York Water Co YORW.
At the time of this writing, the author had no position in the mentioned equities.
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