Market Overview

Gilead Sciences, Atlas Energy And Others Insiders Have Been Buying

Gilead Sciences, Atlas Energy And Others Insiders Have Been Buying

Weak earnings and outlooks have recently prompted some insiders to purchase shares, even as markets take aim for new record highs. Gilead Sciences, Atlas Energy and Intrexon were among those that have seen significant insider buys.

Insiders may sell shares for any number of reasons, but conventional wisdom says that they really only buy shares of a company for one reason -- they believe the stock price will rise and they want to profit from it. Pullbacks and sell-offs can provide a perfect opportunity for investors who have faith in a company to snap up shares.

Atlas Energy

Renowned Wall Street investor Leon Cooperman last week picked up another 250,000 Atlas Energy LP (NASDAQ: ATLS) shares at $30.00 to $30.37 apiece. The total price was more than $7.5 million. Cooperman has been buying batches since the beginning of the year, as Atlas prepares to spin off its non-midstream assets.

This Pittsburgh-based natural gas and oil producer has a market capitalization near $1.5 billion, a dividend yield of about 7.1 percent, and a long-term earnings per share (EPS) growth forecast of more than 49 percent. Shares ended the week at $30.17 and are down around 3 percent year to date.

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Last week, a director took advantage of the pullback following an earnings report with soft revenue to pick up 500,000 shares of Colfax Corp (NYSE: CFX) in a range of $46.12 to $47.62 apiece. That purchase totaled around $23.1 million. Note that the director's stake is 500,000 shares.

This diversified industrial manufacturing and engineering company has a market cap near $6.4 billion. The price-to-earnings (P/E) ratio is less than the industry average, but short interest is almost 10 percent of the float. Shares closed Friday at $52.02, after rising almost 8 percent in the past week.

Fifth Street Finance

The chief executive officer and two directors took advantage of a pullback in shares following a poor earnings report to buy more than 1.1 million shares combined of this asset manager. At a share prices ranging from $6.83 to $7.05, the transactions cost them more than $7.8 million altogether.

Fifth Street Finance Corp.'s (NASDAQ: FSC) market cap is around $1.1 billion, and its dividend yield is near 13.7 percent. Its P/E ratio is less than industry average and its operating margin is greater than the industry average. At Friday's close of $7.23, shares are still down more than 9 percent year to date.

Gilead Sciences

Gilead Sciences, Inc. (NASDAQ: GILD) shares dropped on weak guidance and discounting concerns, and one director stepped up and bought 10,000 shares at $99.92 apiece. However, note that the CEO, the chief financial officer and other executives recently exercised options and sold.

This biotech giant's market cap is more than $152 billion. Its P/E ratio is less than the industry average and the return on equity is more than 122 percent. With shares rising almost 5 percent in the past week to land on $101.90, the buy also looks well-timed. The stock is up about 8 percent year to date.


A director last week obtained more than 1.4 million shares of Intrexon Corp (NYSE: XON) for around $12.6 million. The per-share price was listed at just $8.75, compared to the price above $30 at the time. The same person also bought more than 550,000 shares at the end of January.

The market cap of this West Palm Beach, Florida-based biotech company now is about $4 billion. It is expected to post net losses for both the just completed year and the current year, and short interest is more than 13 percent of the float. The share price at Friday's close was at $39.30.

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Matthews International

One executive recently purchased 52,950 shares of Matthews International Corp (NASDAQ: MATW). At $47.67 apiece, that came to more than $2.5 million, and it brought the director's stake to almost 312,000 shares. Fourth-quarter earnings handily topped consensus estimates.

This $1.6 billion market cap cemetery products and cremation services company has a long-term EPS growth forecast of about 11 percent. The forward earnings multiple is less than the trailing P/E ratio, and the dividend yield is near 1.1 percent. Shares ended Friday at $49.13, so it appears to be a timely buy.

At the time of this writing, the author had no position in the mentioned equities.

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