Massive Biotech Purchases Highlight Insider Buying: Incyte, TransDigm, Prospect Capital, Xenoport and More

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Finally, after what seemed like the longest six weeks in history, the market staged at least a solid attempt to rally and restore investor confidence this past week. Firming oil prices, aided by a pledge from some top producers to freeze production, some decent earnings reports, along with just a sense of relief by investors that a collapse was not imminent, all helped to move indexes higher. Despite the move up, insiders continued to buy shares in a big way this past week.

We cover insider buying every week at 24/7 Wall St., and we like to remind our readers that while insider buying is usually a very positive sign, it is not in of itself a reason to run out and buy a stock. Sometimes insiders and 10% owners have stock purchase plans set up at intervals to add to their holdings. That aside, it still remains a positive indicator.

Here are some of the companies that reported notable insider buying this past week.

Incyte Corp. (NASDAQ: INCY) saw Baker Brothers, one of the top biotech investors on Wall Street, come in and make a staggering purchase of stock. It bought a total of 3,138,592 shares at prices that ranged from $61.93 to $70.72 apiece. The total for the purchase came to a humongous $205 million. Incyte focuses on the discovery, development and commercialization of proprietary therapeutics in oncology. It offers Jakafi for the treatment of myelofibrosis and polycythemia vera cancers. The shares were trading on Friday’s close at $72.70.

TransDigm Group Inc. (NYSE: TDG) saw a director at the company who works at Berkshire Partners buying stock last week. Robert Small acquired a total of 517,300 shares of the stock at prices that fell between $188.18 and $202.28 per share. The total for this gigantic purchase came to an even $100 million. The company designs, produces and supplies aircraft components in the United States. The stock closed on Friday at $207.41, so a well-timed purchase, it appears.


Xenoport Inc.

(NASDAQ: XNPT) had a 10% owner doing some serious buying this past week. Deerfield Management added a huge block of 4,883,761 shares at prices between $3.87 and $3.92. The total for the buy was whopping $19 million. Xenoport is a biopharmaceutical company that focuses on developing and commercializing a portfolio of product candidates for the treatment of neurological and other disorders. The stock ended trading on Friday at $4.25.

Prospect Capital Corp. (NASDAQ: PSEC) saw heavy buying again last week from top C suite executives. The chief executive officer and the chief operating officer again purchased shares of the company on a big scale. The pair bought a total of 1,073,000 shares at prices between $6.15 and $6.22. The total for the trade came to a smooth $6.6 million. This business development company specializes in middle market, mature, mezzanine finance, later stage, emerging growth, buyouts, recapitalizations, turnaround, growth capital, development, subordinated debt tranches of collateralized loan obligations, cash flow term loans and bridge transactions. It also makes real estate investments. Shares ended the week at $6.82.

Taylor Morrison Home Corp. (NYSE: TMHC) also had a 10% owner adding to a position this past week. TPG Group bought an additional 527,400 shares of the company at prices that ranged from $11.90 to $12.39. The total for the buy came to $6.2 million. The company builds single-family attached and detached homes, and it develops lifestyle and master planned communities. The shares traded at $13.25 on Friday’s close, so the timing looks good.

These companies also reported insider buying this past week: Bank of America Corp. (NYSE: BAC), Boston Scientific Corp. (NYSE: BSX), CBRE Group Inc. (NYSE: CBG), Prudential Financial Inc. (NYSE: PRU) and Rayonier Inc. (NYSE: RYN).

Despite the market rally, insiders are still buying at big levels, while insider selling remains dormant. This is a very positive sign for equity investors and the market as a whole.