7 stocks with significant insider buy-signals
A simple but effective way to make investment decisions about stocks is to determine if there have been any insider buying.
Insiders are people in a company who have access to confidential information that could affect the share price. Unfortunately, there have been many examples of insiders using this information to take advantage of uninformed investors. For example, an insider may know that news is about to come out that will drive the stock price higher. They could take advantage of this information by buying shares in someone who doesn’t know.
The US Securities and Exchange Commission has developed rules and regulations to prevent such situations. One of these is the requirement that an insider publicly announce when they buy or sell shares in their company.
Investors can use this information to profit. Indeed, buying from insiders could be a very bullish signal for a stock.
There are many reasons why an insider would sell a company. They may need to raise funds to pay tuition or buy a home. Because of this, insider selling doesn’t give too many good signals.
But when the insiders buy, it’s time to pay attention. There’s only one reason an insider would buy their stock. They believe it is undervalued right now and the price will go up. This is especially the case when the share price has fallen.
Significant insider buying has been made in the past week in the following stocks:
- Ironwood Pharmaceuticals (NASDAQ:IRWD)
- Loan Tree (NASDAQ::TREE)
- Danaher (NYSE:Mr.)
- Sensei Biotherapeutics (NASDAQ:SNSE)
- First water (NYSE:PRMW)
- nautilus (NYSE:NLS)
- DTE Energy (NYSE:DTE)
Insider Buy: Ironwood Pharmaceuticals (IRWD)
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Ironwood Pharmaceuticals is a healthcare company that develops and markets products for the treatment of gastrointestinal disorders. Ironwood Pharmaceuticals is headquartered in Boston, Massachusetts and was founded in 1998.
As you can see from the graph above, IRWD shares have tended to move down over the past four months. In December they were trading around the $ 12 level. Today they are trading around $ 10.70.
Alexander Denner is a director of Ironwood. He must believe that now is a good time to buy the stock because he has just made a significant personal investment. Between February 26 and March 5, Denner bought 2.1 million shares at an average price of about $ 9.73.
Wall Street agrees with Denner. Four companies follow Ironwood and are researching it. The consensus recommendation is a buy and the average price target is $ 11 per share.
Loan Tree (TREE)
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LendingTree operates an online consumer platform in the United States. It offers loans, credit cards, and insurance. LendingTree was founded in 1996 and is headquartered in Charlotte, North Carolina.
On February 25th, LendingTree announced its fourth quarter results. It goes without saying that some investors did not like what they heard. The stock fell roughly $ 100 from around $ 340 to $ 240 per share.
G. Kennedy Thompson is a director at LendingTree. He must believe the sell-off was an overreaction because he just made a significant personal investment. On March 1, he paid around $ 272. one share for a total of 1,500 shares. On February 26, Kennedy bought 3,500 shares at an average price of around $ 276.
The four Wall Street firms that follow and research LendingTree agree that the sale is excessive. The consensus rating is a strong buy and the average price target is $ 345 per share. This is approximately 45% higher than the current price.
Danaher (SS)
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Danaher Corporation designs, builds, and markets professional, medical, industrial, and commercial products and services. The customers are worldwide. Danaher Corporation was founded in 1969 and is based in Washington, DC.
As you can see from the graph above, DHR has lost roughly a fair amount of value since mid-February. During this time there was no company-specific news.
Mitch Rales is the chairman of the Executive Committee. He has to believe that the stock has good value at current levels. On February 26, he bought 6,600 shares at an average price of around $ 221.50.
The street agrees. This company is widespread. Nine companies cover it and are researching it. The consensus rating is a buy and the average price target is $ 268. That is almost 23% more than currently.
Sensei Biotherapeutics (SNSE)
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Sensei Biotherapeutics is a clinical stage immunotherapy company. It is concerned with the research and discovery and development of therapies. The main focus is on the treatment of cancer. Sensei was founded in 1999. Its headquarters are in Rockville, Maryland.
Sensei is a new company. It only went public on February 4th. The initial public offering price was $ 19 per share. When trading on the secondary market began, the price hit $ 26. Since then, stocks have trended lower. The stock is currently trading at $ 16.30.
Cambrian biopharma is a company that has a significant investment in Sensei. James Peyer is a member of the Board of Directors. Both must think that the company’s long-term prospects are good. We reported last week that these two insiders were buying stocks. Since then, they have continued to buy.
On February 26, each of these insiders reported the purchase of 5,000 additional shares. Both paid an average price of around $ 16.25.
Primo water (PRMW)
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Primo Water Corporation provides services for the delivery and filtration of bottled water for the home and office. It offers water dispensers, purified mineral water and drinking water for self-service. Primo was formerly known as the Cott Corporation. In March 2020 the name was changed to Primo Water Corporation. The headquarters are in Tampa, Florida.
In just three weeks, Primo Water’s shares rose from $ 17.50 to $ 14.50. That’s a decrease of about 17%, and there’s no concrete news about the company.
But CEO Thomas Harrington has to believe stocks will soon rebound. On March 1, it was reported that he had purchased 35,000 shares of PRMW at an average price of $ 14.53 per share. This was a total personal investment of nearly $ 510,000.
Only one company on Wall Street follows Primo, and they think it’s a good buy here too. Jeffries & Co. has a buy recommendation with a price target of USD 21. This is roughly 33% higher than where stocks are currently trading.
Nautilus (NLS)
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Nautilus is a fitness solutions company. It designs, develops, and sells cardio and strength fitness products. It was founded in 1986 and is based in Vancouver, Washington.
Nautilus released its earnings a few weeks ago and as you can see on the graph above, shareholders were not impressed. They cut the stock from around $ 30 to around $ 20.
Jim Barr is a director of the company. He sees this sell-off as an opportunity. Its insider buying history implies that better times are ahead for NLS. After the shares were crushed, Barr bought 2,000 shares on Feb.26 at an average price of $ 17.92. This was a personal investment of more than $ 35,000.
Wall Street agrees. Only three companies follow Nautilus and all of them have strong buy recommendations. The average target price is $ 32.25 per share. That is almost 70% more than currently.
Insider Buy: DTE Energy (DTE)
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DTE Energy Company focuses on electricity suppliers. The company generates and sells electricity to approximately 2.2 million residential and industrial customers in southeast Michigan. The company was founded in 1903 and is based in Detroit, Michigan.
DTE rebounded after reporting gains on February 19. However, after a few days, the stock quickly reversed. As you can see from the graph above, DTE rose from $ 120 to $ 125 in just two days before falling to $ 118. It’s now $ 124.
Davis Thomas is a member of the Board of Directors. He has to believe the sale is overkill because he has just made a personal investment of nearly $ 50,000. On February 24, he paid an average of $ 126.56 for 395 shares.
The street thinks this is a good decision. The consensus rating is a strong buy. The average target price is $ 137 per share. This is roughly $ 13 higher than where it is currently trading.
At the time of this writing, Mark Putrino had no direct or indirect position in any of the above securities.