24/7 Insights
- With the second quarter coming to a close and the second half just begun, some insiders stepped up to the buy window.
- A top carmaker boosted its stake in an aircraft maker, and biotech and energy saw notable insider buying.
As the first half of the year concluded and the second half got underway, some corporate insiders made notable insider purchases of biotechnology and energy stocks. Some of them were return buyers, and some took advantage of initial public offerings or private placements. A particularly notable return buyer was major automaker Stellantis. 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 when the new earnings-reporting season begins, many insiders will be 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.
Archer Aviation
- Buyer(s): 10% owner Stellantis
- Total shares: around 17.4 million
- Price per share: $3.16
- Total cost: nearly $55.0 million
After scooping up about $39 million worth of shares back in March, the parent company of Chrysler, Jeep, Fiat, and others has returned to boost its stake in Archer Aviation Inc. (NYSE: ACHR) to more than 56.7 million shares. The electric aircraft maker recently announced its plans for services in the San Francisco area, and earlier received FAA approval to operate as a commercial airline. Though the stock popped more than 21% in the past week, it is still down over 31% year to date, but well above the buyer’s purchase price. The stock has a Buy recommendation from the consensus of analysts. Their mean price target of $9.25 suggests 112% or so upside potential in the next 12 months.
Eliem Therapeutics
- Buyer(s): 10% owner RA Capital Management
- Total shares: around 13.0 million
- Price per share: $3.84
- Total cost: almost $50.0 million
Eliem Therapeutics Inc. (NASDAQ: ELYM), a clinical-stage biotechnology company focused on disorders of the nervous system, recently closed its acquisition of Tenet Medicines. Earlier in the year, it cut staff and shook up leadership. The share price has fallen about 17% in the past month but is still up about 154% since the beginning of the year. The stock does not have a consensus price target, but at least two analysts recommend buying shares. The owner’s stake is up to more than 23.5 million shares. Note that an executive just sold 50,000 shares.
Alumis
- Buyer(s): 10% owner Foresite Capital Management
- Total shares: 2.5 million
- Price per share: $16.00
- Total cost: $40.0 million
San Francisco-based Alumis Inc. (NASDAQ: ALMS) just had an IPO. The clinical-stage biopharmaceutical company is planning multiple Phase 3 clinical trials in the second half of 2024 as a treatment for moderate to severe plaque psoriasis, a skin disease. So far, the shares have traded below the IPO price. The transaction above appears to be a private placement at the IPO price to increase the amount raised by the offering. The owner’s stake is up to almost 5.6 million shares.
PBF Energy
- Buyer(s): 10% owner Control Empresarial de Capitales
- Total shares: 319,000
- Price per share: $44.99 to $45.89
- Total cost: almost $14.5 million
After scooping up $37 million worth of shares in the prior week, this buyer came back for more. Refiner PBF Energy Inc. (NYSE: PBF) is based in Parsippany, New Jersey. It posted better-than-expected top and bottom line results for the first quarter, and the second-quarter report is due August 1. In the past 90 days, the stock is down more than 35%, but shares were last seen trading just above the buyer’s latest purchase price range. Analysts have a mean price target of $52.50, which is more than 14% higher than the current share price. Yet, only six of the 17 analysts who follow the stock recommend acquiring shares. Note that this owner’s stake is up to more than 17.7 million shares, and the same owner also recently acquired shares of ProKidney Corp. (NASDAQ: PROK) and Talos Energy Inc. (NYSE: TALO).
Tamboran Resources
- Buyer(s):10% owner Bryan Sheffield and others
- Total shares:over 557,300
- Price per share:$24.00
- Total cost:almost $13.4 million
Sheffield picked up $12 million worth of Tamboran Resources Corp. (NYSE: TBN) shares in its IPO, and other buyers included the chief financial and operating officers. The company is a developer of low carbon dioxide unconventional natural gas resources in the Northern Territory of Australia. A Helmerich & Payne drilling rig arrived at its Beetaloo Basin development in May. More recently, the company announced a partnership with the Darwin Salties basketball club. The stock was last seen trading just below the IPO price. Its trading range thus far is $21.74 to $25.99 a share.
DiaMedica Therapeutics
- Buyer(s):two 10% owners
- Total shares:2.4 million
- Price per share: $2.50
- Total cost:$6.0 million
These beneficial owners were involved with a private placement that cost them $3 million apiece. Minneapolis-based DiaMedica Therapeutics Inc. (NASDAQ: DMAC) posted better-than-expected first-quarter earnings. The clinical-stage biopharmaceutical company recently announced the expansion of its Phase 2 preeclampsia treatment trial. The volatile stock is down about 21% since the quarterly report, but almost 2% higher than at the beginning of the year and higher than the purchase price above. Three analysts who cover the stock have a consensus target price of $7.00, and they all recommend buying shares.
Also see The Single Best Dividend Stock Yielding Over 12%.
And Other Insider Buying
In the past week, some insider buying was reported at Avangrid, AIG, Atlas Energy Solutions, Citi Trends, Globalstar, Heartland Financial USA, Nike, Re/Max, SAIC, Simon Property Group, and Taysha Gene Therapies as well.
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