As the first-quarter earnings season concludes and the current calendar quarter draws to a close, several corporate insiders have made noteworthy stock purchases. These transactions, involving a preferred telecom stock of Warren Buffett, a refiner with a robust buying trend, an investment management firm, and a specialty retailer, have piqued the interest of market observers. Let’s delve into these significant moves and their implications.
The Importance of Insider Buying
Corporate insiders, including executives and 10% owners, often purchase shares because they believe in the future appreciation of the stock price. Such buying activity can signal confidence in the company’s prospects and serve as a positive indicator for potential investors, especially during uncertain market conditions or near market highs.
With the next earnings season approaching, insiders will soon face restrictions on buying or selling shares. Here are some noteworthy insider purchases reported recently.
PBF Energy: A Major Acquisition
Buyer: 10% Owner Control Empresarial de Capitales
Total Shares: 846,000
Price per Share: $43.84 to $45.00
Total Cost: Over $37.3 million
Control Empresarial de Capitales has significantly increased its stake in PBF Energy Inc. (NYSE: PBF), a Parsippany, New Jersey-based refiner. Despite the company’s strong first-quarter earnings, the stock has declined about 14% since the report but remains up around 3% year-to-date. Analysts have set a mean price target of $52.50, suggesting a potential 16% upside. However, only six out of 17 recommend buying. This owner, now holding over 17.4 million shares, also recently invested in ProKidney Corp. (NASDAQ: PROK) and Talos Energy Inc. (NYSE: TALO).
RH: CEO’s Bold Investment
Buyer: CEO Gary Friedman
Total Shares: Nearly 46,300
Price per Share: $213.30 to $219.99
Total Cost: Almost $10 million
Gary Friedman, CEO of RH (NYSE: RH), made a significant purchase despite the company reporting a larger-than-expected first-quarter net loss. RH’s stock has dropped about 16% since the earnings release and is down 18% year-to-date. Analysts expect a 26% upside with a consensus price target of $302.13, although only four out of 21 recommend buying. Friedman’s stake now exceeds 3.3 million shares.
NeuroBo Pharmaceuticals: A Strategic Bet
Buyer: 10% Owner Dong-A ST
Total Shares: Over 2.5 million
Price per Share: $3.13
Total Cost: Over $7.9 million
Dong-A ST acquired a substantial number of shares in NeuroBo Pharmaceuticals Inc. (NASDAQ: NRBO), a clinical-stage biotech company focusing on novel treatments for cardiometabolic diseases. The stock surged more than 21% recently and is up about 30% year-to-date. Analysts have set a high price target of $27.67, indicating a potential 473% gain.
Franklin Resources: Insider Confidence
Buyer: 10% Owner Charles Johnson
Total Shares: 200,000
Price per Share: $22.68 to $22.92
Total Cost: Over $4.5 million
Charles Johnson, former board chair of Franklin Resources Inc. (NYSE: BEN), made a significant purchase following an earlier buy in June. Despite mixed second-quarter results leading to several price target cuts, the stock is only slightly down since the report and has dropped over 24% year-to-date. The mean price target of $25.10 suggests a 12.3% upside, though only one out of 13 analysts recommends buying.
Liberty Latin America: A Strategic Addition
Buyer: A Director
Total Shares: 400,000
Price per Share: $8.50 to $9.20
Total Cost: Almost $3.6 million
Liberty Latin America Ltd. (NASDAQ: LILA) saw a director increase his stake significantly following mixed first-quarter results. This telecom stock, favored by Warren Buffett, is up more than 31% year-to-date. Analysts see further upside of over 12%, with a price target of $10.70. Two out of four analysts rate it as a Strong Buy.
ClearSign Technologies: A Bold Purchase
Buyer: Former Director
Total Shares: Over 3.3 million
Price per Share: $0.91
Total Cost: More than $3.1 million
ClearSign Technologies Corp. (NASDAQ: CLIR), based in Tulsa and specializing in emissions and energy efficiency technology, reported solid first-quarter results and made a significant sale recently. The stock jumped 32% in the past week, though it’s still down over 22% year-to-date. The purchaser, a beneficial owner with a stake of over 9.5%, recently resigned from the board.
Additional Insider Activity
Other notable insider purchases were reported at Arcadium Lithium, Atlanta Braves, Atlas Energy Solutions, CME, Dolby Laboratories, Howard Hughes, Lions Gate Entertainment, Marvell Technology, Mastercraft Boat, Nextnav, Re/Max, Rocket Companies, SAIC, and Salesforce.
Conclusion
These insider purchases reflect a strong confidence in the future performance of their respective companies. Investors often view such moves as robust indicators, particularly during volatile market periods. While insider buying is not a guaranteed predictor of stock performance, it often signals optimism about a company’s future prospects and can guide investment decisions.