- Insider buying can be an encouraging signal for potential investors, especially when markets are near all-time highs.
- A leading asset manager and a special purpose acquisition companies attracted some notable insider buying last week.
- Beneficial owners were in the spotlight as earnings season means buy windows are close for many insiders.
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 or the markets are near all-time highs.
Note that a new earnings-reporting season is ramping up, and many insiders are prohibited from buying or selling shares. Here are a few of the most noteworthy insider purchases that were reported in the past week.
Early last week, two Acutus Medical Inc AFIB directors took advantage of a public offering of common stock priced at $14 a share. The more than 2.14 million shares they indirectly purchased altogether totaled nearly $30.0 million. As one director has a stake of over 3.4 million shares and the other's stake is more than 4.87 million, each is a beneficial owner as well.
Kerrisdale Advisers recently reported in a 13G filing a 5.25% stake in the medical devices maker, and the share price was at $16.70 as Friday's regular trading ended. That was up almost 24% in the past week. The stock has traded as high as $38.99 in the past 52-weeks, but it has just a $20.00 consensus price target.
Special purpose acquisition company (SPAC) Fast Acquisition Corp FST saw a beneficial owner return to the buy window last week. At $11.30 to $12.19 per share, the 532,000 shares most recently acquired totaled more than $6.20 million. Note that this owner has purchased more than $16 million worth of the stock since the beginning of July and has a stake of over 3.37 million shares.
Fast Acquisition intends to merge with the casino and restaurant holdings of Tilman Fertitta, which includes Golden Nugget, Bubba Gump Shrimp, Joe's Crab Shack and many other brands. The stock closed Friday's trading at $11.61, within that insider's purchase price range. It has traded between $9.59 and $14.10 a share thus far.
Alternative investment management company Blackstone Group Inc BX had a beneficial owner add to its stake by buying 150,000 shares in the past week. The purchase price was $16.00 a share, and that added up to $2.40 million. Including preferred shares converted to common shares, that stake was reported as over 3.75 million shares.
Investors were pleased with Blackstone's better than expected earnings, judging by the 11% pop in the share price last week. The stock hit an all-time high of $113.14 on Friday, and it has overrun the consensus target price of $98.54. The shares ended the week more than 71% higher for the year to date.
A beneficial owner has built a more than 25% stake in Cricut Inc CRCT, a crafting technologies company. More than 24,400 shares were indirectly added in the past week at prices ranging from $31.75 to $34.89 apiece. That cost that owner around $812,000. Note that the owner has been buying shares since late May.
Cricut, which has been public since March, is expected to share its latest quarterly results on August 12. The share price rose more than 13% in the past week to close at $37.80 on Friday, above the owner's latest purchase prices. The stock is up about 110% since its initial public offering. It had just a $34.00 consensus price target on last look.
See also: 3 Stocks Insiders Are Selling
Note that some smaller amount of insider buying at Best Buy Co Inc BBY, Delta Air Lines, Inc. DAL and Jefferies Financial Group Inc JEF was reported in the past week as well.
At the time of this writing, the author had no position in the mentioned equities.
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