Warren Buffett Boosts This Stake Again, Plus Notable CEO Insider Buying

Investing

Published: May 5, 2024 7:45 am

The Oracle of Omaha yet again boosted his stake in a media giant’s tracking stocks, though the transaction was smaller than previous ones. Meanwhile, some chief executive officers, and one activist investor, made notable insider purchases in the past week. Let’s take a look.

Is Insider Buying Important?

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 an earnings-reporting season in full swing, 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 or so, starting with the largest and most prominent.

Liberty Media

Warren Buffett insider buying — Buffett is still buying into Sirius XM satellite radio.

Buyer(s): 10% owner Berkshire Hathaway
Total shares: more than 311,600
Price per share: $24.75 to $25.60
Total cost: over $7.9 million

After scooping up almost $16 million worth of Liberty Media Corp. (NASDAQ: LSXMK) stock the prior week, Berkshire Hathaway has increased its stake in the holding company again to around 70.0 million shares. The series C shares were last seen trading below that purchase price range, and the share price is down more than 14% since the beginning of the year. Note that Liberty Media and Sirius XM Holdings Inc. (NASDAQ: SIRI) plan to merge, and Liberty Media recently completed an acquisition of its own.

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Loar

Buyer(s): three directors
Total shares: over 71,400
Price per share: $28.00
Total cost: about $6.0 million

These directors each received about $2 million worth of Loar Holdings Inc. (NYSE: LOAR) shares as part of its initial public offering. The company is an aerospace components manufacturer founded in 2012. Loar says it intends to use the funds raised by the IPO to pay down debt. It has not been profitable since 2015. Shares jumped out of the gate and have so far traded as high as $54.32 apiece. The stock debuted on the same day as two other successful IPOs, a sign that the IPO market outlook may be improving.

Heartland Express

Buyer(s): CEO Michael Gerdin and other insiders
Total shares: almost 467,800
Price per share: $9.68 to $10.53
Total cost: more than $4.7 million

Newsweek named Heartland Express Inc. (NASDAQ: HTLD) one of the most trustworthy companies of 2024. However, Barclays and Morgan Stanley lowered their price targets as the leading trucking company posted disappointing first-quarter results. The stock is down about 27% year to date. Shares hit a 52-week low of $9.63 this past week but were last seen trading above the buyers’ purchase price range. Despite a consensus price target up at $12.25, only one of 12 analysts recommends buying shares.

Hexcel

Buyer(s): new CEO Tom Gentile and four other insiders
Total shares: 49,000
Price per share: $64.09 to $67.00
Total cost: almost $3.2 million

The new chief executive and the outgoing one each acquired 15,000 Hexcel Corp. (NYSE: HXL) shares. The industrial materials manufacturer recently posted mixed first-quarter results and declared a $0.15 per share dividend, the same as in the prior quarter. The share price is up about 10% since the report, but it is still about 8% lower year to date. The stock has trended higher since it traded for about $25 a share in May of 2020. Analysts anticipate more than 11% further upside in the coming year, given their mean price target of $75.53.

Citi Trends

Buyer(s): 10% owner Fund 1 Investments
Total shares: 91,600
Price per share: $21.41 to $21.79
Total cost: almost $2.0 million

This beneficial owner and activist investor aims to shake up the Citi Trends Inc. (NASDAQ: CTRN) board of directors. The retailer fell short of Wall Street estimates in its fourth-quarter report. The stock pulled back afterward and is now down almost 23% year to date, but the share price was last seen just above the buyer’s purchase price range. The stock is more than 32% higher than a year ago, outperforming the S&P 500 in that time. The $30.75 consensus price target represents about 40% upside potential. Note that this buyer also just acquired some shares of Tile Shop Holdings Inc. (NASDAQ: TTSH).

Cleveland-Cliffs

Buyer(s): CEO Lourenco Goncalves and another director
Total shares: 85,000
Price per share: $16.73 to $17.02
Total cost: over $1.4 million

Cleveland-Cliffs Inc. (NYSE: CLF) saw its chief executive pick up 60,000 of those shares, lifting his stake to more than 2.7 million shares. The steel producer’s first-quarter top and bottom lines lagged consensus projections. The stock has pulled back about 17% since that report but is still around 13% higher than a year ago, and shares were last seen above the buyers’ purchase price range. The consensus price target signals almost 24% upside in the next 12 months, but only two out of nine analysts covering the stock recommend buying shares.

Hertz Global

Buyer(s): CEO Gilbert West
Total shares: 250,000
Price per share: $4.42 to $4.53
Total cost: over $1.1 million

The recently appointed Hertz Global Holdings Inc. (NASDAQ: HTZ) chief executive boosted his stake to more than 2.1 million shares. The vehicle rental giant blamed its recent disappointing quarterly results on losses from its electric vehicle fleet. Since then, the stock has dropped about 14%. Though shares are down nearly 52% year to date, they were last seen trading for more than the purchase price range above. The share price is also higher than the consensus price target, meaning analysts are skeptical of any upside in the coming year.

And Other Insider Buying

Smaller amounts of insider buying at Churchill Downs, CVS, Intel, and others.

In the past week or so, some insider buying was reported at Churchill Downs, Crown Castle, CVS Health, Enphase Energy, GE HealthCare Technologies, Intel, J.B. Hunt Transport Services, Regions Financial, and Skyworks Solutions as well.

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