These 3 CEOs Are Still Making Insider Purchases
Insider buying has dwindled as the markets have hit new highs and a new earnings season has begun.
- However, three CEOs seem to have missed the memo and have made notable insider purchases regardless.
- Strong insider buying is often considered a positive sign for investors, particularly during volatile periods.
With the markets having reached new all-time highs, as well as the second-quarter earnings reporting season in full swing, insider buying has slowed to a crawl. However, some insiders don't seem to have gotten the memo. Specifically, the chief executive officers at Akamai Technologies, Inc. (NASDAQ: AKAM), Opko Health Inc. (NASDAQ: OPK) and Restoration Hardware Holdings Inc (NYSE: RH) increased their stakes recently.
On the other hand, the number of insiders selling shares is plentiful, which should be no surprise. Executives and other insiders at the likes of American Tower, CarMax, Delta Air Lines, Electronic Arts, Facebook and Yum Brands have all taken the opportunity lately to shed some shares and cash in.
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 from it. Insider buying can be an encouraging signal for potential investors. A few other companies -- Alcoa, Brink's, First Financial, Overstock.com, Ryman Hospitality, Signet Jewelers -- also have seen insiders come to the buy window, but here we focus on three companies with the most notable transactions in the past week.
CEO Leighton Thomson has scooped up more than 17,000 shares of this Massachusetts-based cloud services provider at $57.28 per share. That totaled almost $999,900. Note that Thomson also purchased batches of less than 20,000 shares in the middle of each month going back as far as March. The stock has been mostly range-bound between $50 and $55 during that time.
This leading content delivery network services provider for media and software delivery has a market capitalization near $10 billion. It pays no dividend. The share price is up about 40 percent since the low back in February and closed most recently at $57.45. The Nasdaq is less than 18 percent higher in that time.
Chairman and CEO Phillip Frost continues to buy batches of shares periodically, as he has done for well more than a year. So far this month he has added 25,800 Opko Health shares. At between $9.82 and $9.62 per share, those purchases cost him more than $250,000. Note that he bought more than 215,000 shares in June, and the latest buy brings his stake to just shy of 160 million shares.
This Miami-based healthcare company has a market cap of more than $5 billion, and it recently announced the acquisition of Transition Therapeutics. Note that short interest is more than 21 percent of the total float. Shares closed most recently at $9.89, as they try to recover from a 14 drop in June. The stock is still down less than 2 percent year-to-date.
Chairman and CEO Gary Friedman purchased almost 33,000 shares of this retailer of upscale home furnishings. At a share price of $27.59, that transaction totaled more than $908,000 and it brought his stake to about 2.2 million shares. The purchase also gave the stock a much need boost this week.
This California-based company has a market cap near $1 billion, but it doesn't offer a dividend. More than 24 percent of the total float is short. The stock closed most recently at $29.01 per share, so the buy appears to be well timed. The stock still is down more than 63 percent since the beginning of the year, and there has been some recent speculation about it as a merger or buyout candidate.
At the time of this writing, the author had no position in the mentioned equities.
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