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In the past week or so, beneficial owners Carl Icahn made a big bet on Centuri Holdings Inc. (NYSE: CTRI), his second significant purchase this month. Meanwhile, tumbling share prices at Biohaven Ltd. (NYSE: BHVN) and Resideo Technologies Inc. (NYSE: REZI) tempted some insiders to boost their stakes significantly. These were the most prominent insider purchases in that time, but there were a number of other notable ones as well.
Carl Icahn has made another huge bet, boosting his stake in a utility infrastructure services company.
But that was not the only notable insider buying recently.
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While insider buying is typically slower when markets are near all-time highs and when earnings-reporting season is in full swing, it never seems to dry up altogether. These recent notable purchases attest to this. Let’s take a quick look at these notable transactions and others.
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What does insider buying tell us?
A well-known adage reminds us that corporate insiders and 10% owners really only buy shares of a company because they believe the stock price will rise and they want to profit from it. Thus, insider buying can be an encouraging signal for potential investors. This is all the more so during times of uncertainty in the markets, and even when markets are near all-time highs.
With the third-quarter earnings-reporting season still underway, many insiders are prohibited from buying or selling shares. Below are some of the most notable insider purchases that were reported recently, starting with the largest and most prominent.
Buyer(s): 10% owner Carl Icahn
Total shares: almost 3.5 million
Price per share: $21.50
Total cost: about $75.0 million
While Centuri just had a public offering of stock, Icahn’s transaction was a private placement. These offerings followed a third-quarter report that included record revenue and a record backlog, but also disappointing earnings and negative free cash flow.
Shares of the Arizona-based utility infrastructure services company are up 3.4% since the earnings report, outperforming the S&P 500. Yet, they were last seen trading for less than the purchase price above. Analysts have a $24.33 mean price target, meaning they see 13.3% upside in the coming 12 months.
Icahn’s stake is up to 14.3 million shares. In addition, Icahn just acquired almost $21 million worth of Monro Inc. (NASDAQ: MNRO) shares.
Buyer(s): 10% owner CD&R Channel Holdings II
Total shares: almost 1.7 million
Price per share: $30.35 to $32.51
Total cost: nearly $53.0 million
Resideo Technologies stock fell more than 20% after the home automation and security solutions provider reported mixed quarterly results and a weak forecast. The buyer took advantage of the pullback to boost its stake to almost 15 million share.
Despite the recent retreat, the share price is still up 36.1% since the beginning of the year. Shares were last seen trading within the buyer’s purchase price range. However, analysts see the stock rising 26.5% in the coming year to $41.50 a share. Both analysts who cover the stock recommend buying shares.
Note that this buyer has been accumulating shares since at least May, almost tripling its stake in that time. Also, a director picked up almost 8,150 Resideo shares earlier this month.
Buyer(s): CEO Vlad Coric and other directors
Total shares: about 4.4 million
Price per share: $7.50
Total cost: around $32.9 million
These buyers took advantage of a public offering of Biohaven shares intended to raise $175 million for general corporate purposes. The offering followed a third-quarter earnings report and news that the clinical-stage biopharmaceutical company would slash R&D spending to cut costs.
The share price is 48.8% lower than a month ago, after recently hitting a multiyear low. But it was last seen about a dollar per share more than the offering price. And analysts anticipate huge growth in the next 52 weeks to their mean price target of $32.48. The consensus recommendation is still to buy shares, though sentiment has grown a bit more bearish recently.
Note that Coric picked up about $5 million worth of the shares via a family trust.
These were not the only notable insider purchases of the past week or so. Here’s a quick look at some others.
Recently, some smaller insider buying was reported at Amcor, Apple Hospitality REIT, Atlanta Braves, Blackstone, California Resources, Columbia Sportswear, Crocs, DraftKings, Entergy, Fastenal, Huntsman, Louisiana-Pacific, LyondellBasell Industries, Magnolia Oil & Gas, Marriott Vacations Worldwide, Molson Coors Beverage, Mosaic, Perrigo, Norwegian Cruise Line, Opendoor Technologies, RXO, Starbucks, Western Union as well.
Big Insider Purchases by Carl Icahn, Mario Gabelli, and Others
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