Insiders Scoop Up Shares of This Biotech IPO, Energy Giant, and More

In the past week or so, beneficial owners took advantage of MapLight Therapeutics Inc.’s (NASDAQ: MPLT) initial public offering. Meanwhile, the executive board chair of Kinder Morgan Inc. (NYSE: KMI) boosted his stake, and an insider bought a big block of MSC Industrial Direct Co. Inc. (NYSE: MSM) shares after it released a better-than-expected earnings report.

While insider buying is typically slower when markets are near all-time highs and when earnings-reporting season is in full swing, it never seems to dry up altogether. These recent notable purchases attest to this. Let’s take a quick look at these notable transactions and others.

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.

With the third-quarter earnings-reporting season still underway, many insiders are prohibited from buying or selling shares. Below are some of the most notable insider purchases that were reported recently, starting with the largest and most prominent.

MapLight Therapeutics

• Buyer(s): 10% owners Catalyst4 and Novo Holdings
• Total shares: almost 6.4 million
• Price per share: $17.00
• Total cost: around $108.7 million

An initial public offering brought out these buyers. MapLight Therapeutics is a clinical-stage biopharmaceutical company engaged in the development of novel therapeutics for central nervous system disorders like schizophrenia and Alzheimer’s. The gross proceeds of the IPO totaled $296.3 million.

Thus far, shares have traded in a range of $15.00 to $20.86, and they were last seen changing hands for over a dollar less than the offering price.

Note that Catalyst4 is a nonprofit founded by Google co-founder Sergey Brin, and it acquired more than 5 million of the shares listed above. Meanwhile, Novo Holdings, which is affiliated with Novo Nordisk A/S (NYSE: NVO), sold shares of IO Biotech Inc. (NASDAQ: IOBT) this past summer.

Kinder Morgan

• Buyer(s): Executive Chair Richard Kinder and another director
• Total shares: over 1.0 million
• Price per share: $25.80 to $26.28
• Total cost: more than $25.9 million

Kinder purchased a million of these Kinder Morgan shares, his largest single purchase in the past year. He acquired more than 670,000 shares this past summer. His stake is now up to 246.2 million shares.

Shares of this Houston-based energy infrastructure giant have retreated more than 5% since the most recent earnings report. The stock was last seen just below the purchase price range above. Analysts have a consensus price target of $31.05, which signals 19.6% upside in the next 12 months. Of 21 analysts that follow the stock, 12 recommend buying shares. Jefferies initiated coverage with a Hold rating last month.

MSC Industrial Direct

• Buyer(s): a director
• Total shares: around 181,800
• Price per share: $83.60 to $85.00
• Total cost: over $15.4 million

MSC Industrial Direct posted better-than-expected quarterly results last month. Since then, the stock is marginally lower, but shares were last seen trading for more than the purchase price range above. The year-to-date gain is about the same as that of the S&P 500.

The $87.50 consensus price target is less than 3% higher than the current share price. On average, analysts have Hold-equivalent ratings on the shares. However, J.P. Morgan recently reiterated an Overweight rating.

Note that this buyer’s stake is up to more than 2.3 million shares, making him a beneficial owner.

And Other Insider Buying

These were not the only notable insider purchases of the past week or so. Here’s a quick look at some others.

Recently, some smaller insider buying was reported at Atlanta Braves, Blackstone, Caesars Entertainment, Cigna, Coca-Cola, Iridium Communications, Matador Resources, Norfolk Southern, Northern Trust, Sonoco Products, Terex, Verisk Analytics, WD-40, and Winnebago as well.

Insiders Are Scooping Up Shares of a Miner, a Driller, and a Biotech