When the markets are challenging all-times highs, you might expect to see record insider selling by corporate insiders and management. So, what does it tell you if a CEO, board member or other corporate insider is buying shares of the company’s stock on the same week that the S&P 500 hit a new high? Most likely, these insiders think their stock is going to rise — or at a minimum they are communicating that the shares may be undervalued based on internal metrics.
Each week at 24/7 Wall St., we highlight insider buying to give our readers up-to-date information on the top stocks insiders are scooping up. Included is the size of the purchase and what that means in the grand scheme of things. These are this week’s top six insider purchases.
Annaly Capital Management Inc. (NYSE: NLY) is the benchmark for most mortgage real estate investment trusts (REITs), and it has a dividend yield currently north of 10%. What stands out here is that its Chairman Wellington Denahan bought some 86,837 shares at an average price of roughly $11.52 for a total purchase price that came to $362 above the $1 million mark. Friday’s trading gave back the gains from earlier in the week as well, when the stock fell over 1% to $11.77 on the day. This stock has risen since it beat earnings and caught a key analyst upgrade.
GNC Holdings Inc. (NYSE: GNC) was a key purchase disclosed this week, with the brand new nonexecutive chairman, Michael Hines, deciding to cast his first serious vote of confidence. Hines bought 30,000 shares on the open market at an average price of $35.4144, for a total purchase price of $1.062 million. More developments were covered in detail here.
Pacific Biosciences of California Inc. (NASDAQ: PACB) had no news on Friday to speak of, yet shares rose 5% to $5.21. Maybe the excitement was that a director named William Ericson, tied to Mohr Davidow Ventures, had SEC filings this week confirming the additional purchases of stock worth more than $1 million. The move builds on prior purchases and takes the holdings up to 5.19 million shares in total, upon the latest filing.
Republic Services Inc. (NYSE: RSG) saw Bill Gates’s Cascade Investment, his private investment vehicle, purchase yet another 120,541 shares for a price of $4.75 million in the week. This is becoming habitual buying, and Cascade now holds more than 100.45 million shares. It is hard to think of it, but imaging one of the wealthiest men in the world saying: “Bill Gates, garbage man here!”
New Mountain Finance Corp. (NYSE: NMFC) may not be the most well-known company out there, but a director named Steven Klinsky bought up another 117,940 shares worth almost $1.8 million at an average price of roughly $15.19. The purchases were disclosed this past Monday, but they took place the prior week. This comes to almost $5 million that Klinsky has shoveled out to buy shares. At $15.12, it has a 52-week range of $13.86 to $15.31. Maybe he likes that 9.5% dividend yield.
There were of course other insider purchases made in the past week, but these were the ones that stood out the most to us. Several were screened out due to insiders buying into secondary offerings.