Since the beginning of the year, the number of notable insider purchases has been lower than usual. Yet some return buyers continue to build stakes, including huge new purchases in an entertainment giant, a mortgage real estate investment trust, and a specialty retailer hit hard after an earnings miss. An initial public offering by a food producer also brought out the insiders. Let’s take a quick look at these transactions.
Is Insider Buying Important?
What does insider buying tell us?
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.
The earnings-reporting season is underway, so 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, starting with the largest and most prominent.
TKO
Shares near an all-time high.
- Buyer(s): 10% owner Silver Lake West HoldCo
- Total shares: about 573,800
- Price per share: $147.27 to $159.73
- Total cost: around $88.7 million
After scooping up $54 million worth of shares in the prior week, this buyer came back for more. TKO Group Holdings Inc. (NYSE: TKO | TKO Price Prediction) is the parent of Ultimate Fighting Championship and World Wrestling Entertainment. There has been speculation that UFC programming could end up on Netflix, and UFC recently named its official wireless provider in the United States. Since the third-quarter report, the stock is up almost 3% and trading near an all-time high near $160 per share. The $159.82 consensus price target suggests only marginal upside in the next 12 months, but all but three out of 18 analysts recommend buying shares, three of them with Strong Buy ratings. Goldman Sachs recently maintained its Buy rating. Note that the buyer’s stake is up to more than 1.5 million shares.
Smithfield Foods
Insiders are all hungry for this IPO.
- Buyer(s): CEO Shane Smith and others
- Total shares: almost 3.3 million
- Price per share: $20
- Total cost: less than $65.7 million
Several insiders took advantage of this meat processor’s initial public offering. However, one particular director scooped up the lion’s share in this transaction, 3.2 million shares. Smith acquired 30,000 shares. Smithfield Foods Inc. (NASDAQ: SFD) is one of the largest pork producers in the world, with such well-known brands as Smithfield, Eckrich, Nathan’s Famous, Farmland, and Armour. Shares have changed hands for between $19.10 and $22.03 thus far and were last seen above the IPO price. The offering raised $552 million and valued the company at $7.8 billion.
Sunrise Realty Trust
Another return buyer.
- Buyer(s): Executive Chair Leonard Tannenbaum
- Total shares: 1.0 million
- Price per share: $12.00
- Total cost: $12.0 million
This is another return buyer, who acquired almost 1.4 million shares of Sunrise Realty Trust Inc. (NASDAQ: SUNS) in December. The transaction above was part of a secondary stock offering. The institutional lender just committed to an almost $31 million bridge loan. The share price is 16% lower than at the beginning of the year but up more than 6% from a year ago. It has underperformed the S&P 500 in the past year. The $16.75 consensus price target suggests 42% upside in the coming 52 weeks. Two analysts cover the stock, and both recommend buying shares. Note that Tannenbaum’s stake is up to more than 2.4 million shares.
Lineage Cell Therapeutics
Huge upside expected.
- Buyer(s): 10% owner Broadwood Partners
- Total shares: almost 7.9 million
- Price per share: $0.76
- Total cost: $6.0 million
This transaction is part of a previously announced registered direct offering. Earlier this month, California-based Lineage Cell Therapeutics Inc. (NYSE: LCTX) sent a letter to shareholders highlighting the company’s recent achievements and outlook for 2025. Since the beginning of the year, the share price is up almost 19%, easily outperforming the broader markets. Yet, year-over-year, the stock is down around 40%. In the coming year, though, analysts anticipate huge growth to their $4.50 consensus price target. All but one of the seven analysts who cover the stock recommend buying shares. The buyer’s stake is up to more than 49 million shares.
1-800 Flowers.com
Return buyer shrugs off disappointing earnings.
- Buyer(s): 10% owner Fund 1 Investments
- Total shares: about 486,100
- Price per share: $7.28 to $8.86
- Total cost: more than $3.8 million
1-800 Flowers.com Inc. (NASDAQ: FLWS) just posted disappointing quarter results and the stock retreated more than 15% afterward. It is still up almost 4% since the beginning of the year, about the same as the S&P 500, and on last look shares were trading within the purchase price range above. The $10.38 mean price target indicates Wall Street sees about 29% upside in the coming year. The consensus recommendation is to buy shares, and it has been for at least three months. Note that this buyer scooped up $3.7 million worth of shares earlier in January, and it has also been purchasing Tile Shop Holdings Inc. (NASDAQ: TTSH) shares.
And Other Insider Buying
Some smaller insider buys at Adobe, GM, and more.
In the past week, some insider buying was reported at Adobe, Atlanta Braves, Ball, General Motors, Opko Health, PBF Energy, Synovus Financial, and Texas Capital Bancshares as well.
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