Another Huge Buffett Purchase Highlights Recent Insider Buying

Investing

Published: February 12, 2024 8:53 am

The most notable of insider purchases in the past week or so is again legendary investor Warren Buffett boosting the Berkshire Hathaway stake in his favorite petroleum company. Furthermore, a couple of health-care-related initial public offerings tempted insiders to show their support for their companies.

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.

Remember that with the earnings-reporting season still underway, many insiders are prohibited from buying or selling shares. Below are some of the more notable insider purchases that were reported in the past week.

Buffett’s Favorite Oil Company

Buyer(s): 10% owner Berkshire Hathaway
Total shares: around 4.3 million
Price per share: $56.07 to $58.11
Total cost: almost $245.9 million

After scooping up about $900 million worth of shares in December, Buffett has bolstered the Occidental Petroleum Corp. (NYSE: OXY) stake even further ahead of the company’s fourth-quarter report. The over 248.0 million share total is a stake of more than 28%. Shares are up marginally in the past week and were last seen trading within Buffett’s latest purchase price range. However, they are still in the red year to date, by less than 3%. The $66.84 consensus price target suggests over 15% upside potential in the next 12 months.

A Soaring Biopharma Stock

Buyer(s): director
Total shares: almost 2.5 million
Price per share: $12.09
Total cost: shy of $30.0 million

Shares of Boston-based biopharmaceutical company Astria Therapeutics Inc. (NASDAQ: ATXS) slumped about 70% last year but have soared so far this year. After almost a 99% year-to-date rise, the share price is about 29% higher than the purchase price above. The consensus price target indicates analysts see over 36% further upside, and, no surprise, their consensus recommendation is to buy shares. Note that the buyer, whose stake is now more than 4.8 million shares, also purchased shares of Solid Biosciences Inc. (NASDAQ: SLDB) recently.

Buying Into a Health Care IPO

Buyer(s): 10% owner CVF and two directors
Total shares: more than 1.1 million
Price per share: $15
Total cost: about $17.0 million

An IPO for Fractyl Health Inc. (NASDAQ: GUTS) prompted this insider buying. This metabolic therapeutics company is focused on treating diabetes and obesity with minimally invasive procedural therapies. However, these buyers saw no quick profit, as the share price has tumbled by more than 20% since the IPO. The company was incorporated in 2010 and is based in Lexington, Massachusetts. (12 Companies That Had Their IPO in 1993: Best and Worst Performers)

A Trucking Company Turns to AI

Buyer(s): 10% owner MFN Partners
Total shares: more than 747,400
Price per share: $20.25
Total cost: over $15.1 million

RXO Inc. (NYSE: RXO) just posted better-than-expected quarterly earnings and recently launched an AI-powered initiative. Shares of this Charlotte, North Carolina-based trucking company are down almost 11% year to date but were last seen trading above the owner’s purchase price at around $21. Note that this buyer also scooped up more than $4.5 million worth of the company’s shares back in November.

A Return Trip to the Buy Window

Buyer(s): 10% owner Cormorant Asset Management
Total shares: 750,000
Price per share: $19
Total cost: over $14.2 million

This buyer picked up more than 282,600 Corbus Pharmaceuticals Holdings Inc. (NASDAQ: CRBP) shares last week, before returning to take advantage of a public offering of common stock. The buyer’s stake is now up to more than 1.4 million shares. Some good news from the FDA last month sent shares soaring, and the stock is around 258% higher year to date. Analysts still see plenty of room for Corbus stock to run, given their consensus price target of $85.50. Of course, their consensus recommendation is to buy shares.

Another Health Care IPO

Buyer(s): CEO Amit Etkin, other officers, and a 10% owner
Total shares: almost 621,700
Price per share: $16
Total cost: more than $9.9 million

Clinical-stage biopharmaceutical company Alto Neuroscience Inc. (NYSE: ANRO) also just came public, and these insiders wanted a piece of the pie. Shares of this depression- and PTSD-focused company were last seen trading near $19 apiece, more than 18% above the IPO price. However, the post-IPO high is $24 per share. The company says that, with its AI-enabled biomarker platform, it aims to redefine psychiatry at a time when the world needs it most.

And Other Insider Buying

Source: Ron Wurzer / Getty Images

In the past week, some insider buying was reported at America’s Car-Mart, Charter Communications, Consolidated Edison, Estee Lauder, Intel, NextEra Energy, Post Holdings, UPS, and Zions Bancorp as well.

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