There are a number of reasons that insiders and large holders sell shares of public companies. There is really only one reason that insiders and large holders buy shares, and that is because they think the stock is undervalued or will rise soon. 24/7 Wall St. tracks insider buying and selling, and here we look at eight companies where insider buying has stood out over the past week or so.
CytRx Corp. (NASDAQ: CYTR) recently sold 8 million shares at $2.50 per share to raise capital. The biotech R&D company, with a focus in oncology, raised the capital to help fund its drug candidates aldoxorubicin and tamibarotene. Scott Patterson now holds almost 4.3 million shares after buying another 1.2 million shares in this secondary offering. It is worth noting that this offering did crush the shares, and the $2.50 share price of late compares to a 52-week range of $1.68 to $5.50.
DaVita Inc. (NYSE: DVA), the leader in kidney dialysis services, is being accumulated routinely by Berkshire Hathaway Inc. (NYSE: BRK-A). Team Buffett’s new portfolio managers have been accumulating this stock with the purchase of about another 600,000 shares or so in the past month, and it now holds well over 10.5 million shares for a position worth about $1.45 billion. More importantly, Berkshire Hathaway owns more than 10% of this company, and it has been a buyer since the high $70’s and low $80s up to $109 recently. While valuation is a concern, this company more than fits the bill of a company that Berkshire Hathaway might want to own outright due to its critical demand situation regardless of the economic cycles.
Hansen Medical Inc. (NASDAQ: HNSN) is in the field of intravascular robotics with its Sensei-X Robotic Catheter System, Magellan Robotic System and NorthStar Robotic Catheter. The market value is only $111 million or so now, and this one has felt like a long, slow bleed. Larry Feinberg now owns close to 4.95 million shares, according to Finviz.com but the Form 4 summaries show that the shares are actually under Oracle Partners and related affiliates, and that the total indirect holdings are now 13.9 million shares in indirect holdings. With shares around $1.82, the 52-week range is $1.42 to $4.03.
Janus Capital Group Inc. (NYSE: JNS) has recovered handily from its lows of the past year, but the asset manager and mutual fund outfit has seen Dai Ichi Life Insurance Co. continue to acquire shares this last week. The insurance company now owns almost 17.3 million shares. Janus manages more than $152 billion and has a market value of about $1.7 billion. Dai Ichi now holds more than 15% of Janus, and it is worth noting that Janus has been one of the asset management firms that has long been considered a takeover target, even if no known discussions about that have been present of late.
Office Depot Inc. (NYSE: ODP) is in the retail office products space, a sector that investors just refuse to care about. A fund manager called Starboard Value has been accumulating this stock relentlessly. Starboard is a $1 billion fund that focuses on value and activist positions, and it sure seems as though the group is betting that Office Depot will be consolidated, as it owns more than 26.5 million shares worth almost $65 million for a company with a market cap of just under $700 million.
Sonus Networks Inc. (NASDAQ: SONS) has had a rough 2012, and this SIP-based solutions communications service provider has fallen far from its levels back during the tech bubble a decade ago. We have seen that Empire Capital Management, a technology investing hedge fund, has continued to selectively purchase shares. In the past six weeks its stake has grown to 37.06 million shares, from 36.7 million shares at the end of August. Empire now owns more than 13% of Sonus, and it has continually been adding to its position. If the buying history is any indication, it seems likely that more shares will be accumulated in the near future.
Tenet Healthcare Corp. (NYSE: THC) is the hospital and medical center owner and operator worth about $2.5 billion in market value. Its shares are about 10% shy of a 52-week high at $24.12. Glenview Capital Management spent more than $10 million in the past week to buy more shares. Glenview is now owns more than 10%, and more than 13.6 million shares as of now. After having problems in the past, Tenet now trades at about 10-times forward earnings. It also carries more than $4.5 billion in long-term debt.
ViaSat Inc. (NASDAQ: VSAT) is into satellite and wireless communications, and its market value is almost $1.7 billion. With shares close to $39, its 52-week trading range is $33.09 to $49.80. FPR Partners added more than 800,000 shares to its holdings over the month of October and now holds almost 5.4 million shares. The move has taken its ownership above that 10% threshold. The Baupost Group is the largest holder of ViaSat with more than 24% ownership. The top five holders own about 50% of this company, and the top 10 holders own about 60% of it. Earnings have been spotty, but the company is expected to return to normalized profitability in 2013, although it trades at 27-times forward year estimates.
JON C. OGG