- Insider buying can be an encouraging signal for potential investors, especially when markets are near all-time highs.
- A couple of infrastructure-related companies attracted some notable insider buying last week.
- Beneficial owners were in the spotlight again, 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 with earnings-reporting season in full swing, 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.
A beneficial owner has built a more than 25% stake in Cricut Inc CRCT, a crafting technologies company. About 804,100 shares were indirectly added in the past week at prices ranging from $32.77 to $34.98 apiece, costing the owner around $27.16 million. 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 declined more than 9% in the past week to close at $34.13 on Friday, within the owner's latest purchase price range. The stock is up more than 87% since its initial public offering. It had just a $34.00 consensus price target on last look.
Beacon Roofing Supply
Late last week, a beneficial owner of Beacon Roofing Supply, Inc. BECN added to its stake ahead of the upcoming earnings report. At about $55.53 apiece, the more than 108,000 shares indirectly purchased totaled nearly $6 million. This purchase increased the owner's stake to more than 14.42 million shares. The company's float is about 55.10 million shares.
The Virginia-based company is expected to share its fiscal third-quarter earnings on August 5.
The share price was at $53.48 as Friday's regular trading ended. That was up only fractionally for the past week and more than 3% below the owner's purchase price. The stock has traded as high as $60.93 in the past 52-weeks, but it has a $67.80 consensus price target.
Communications infrastructure company Crown Castle International Corp CCI had a director acquire 11,200 shares in the past week. At per share purchase prices ranging from $191.27 to $191.76, costing a total of $2.14 million. Note that 7,000 of those shares were purchased via trust for the benefit of the director's children. The director's own stake was listed as more than 141,700 shares.
Crown Castle posted its second-quarter results and raised its full-year guidance in the previous week. The stock is down about 5% since the report, ending Friday at $193.09 a share, above the director's purchase price range. The share price is still more than 21% higher since the beginning of the year. Overall, analysts recommend buying the shares.
Special purpose acquisition company (SPAC) Fast Acquisition Corp FST saw a beneficial owner return to the buy window last week. At $11.64 to $12.70 per share, the 202,500 shares most recently acquired totaled more than $2.47 million. Note that this owner has purchased more than $18 million worth of the stock since the beginning of July and has a stake of over 3.57 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 ended the week's trading at $12.45, within that insider's purchase price range. It has traded between $9.59 and $14.10 a share thus far.
See also: 4 Stocks Insiders Are Selling
Note that some smaller amount of insider buying at AAR Corp. AIR, Anthem Inc ANTM and Archer-Daniels-Midland Co ADM 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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