Insider buying can be a bullish indicator for a stock and provides another piece of information for investors to weigh when doing investment research. Company executives, board members, and shareholders with stakes exceeding 10% must notify the SEC within two days of their share purchases (and sales) in a Form 4 filing. Each week, I take a look at the largest insider purchases in search of investing opportunities with this often positive indicator.
|
Company Name |
Market Cap |
No. Shares Purchased |
$ Value Shares Purchased |
CAPS Rating
|
|---|---|---|---|---|
|
Mannkind Corp |
$700 million | 700,000 | $5.01 million | ** |
|
American Express
|
$50 billion | 20,000 | $788,000 | *** |
Sources: Barron's; Yahoo! Finance; Motley Fool CAPS.
Alfred Mann, the founder and CEO of biotech company Mannkind, purchased more than $5 million of the company's stock for $7.15 per share. The purchase was tied to a financing arrangement announced in August, where an entity controlled by Mann would cancel an equivalent amount of debt in exchange for shares.
Mannkind continues to work to get FDA approval for its Afrezza inhaled insulin product for diabetics. As you'd expect, the company's stock has been closely tied to Afrezza's fortunes. In March, the FDA requested additional data on the drug, causing the stock to plunge 25% in a day. The FDA is scheduled to take action on the diabetes drug on Dec. 29, so expect another big pop or big drop soon.
American Express board member Ted Leonsis bought 20,000 shares of the company for $39.38 each. Leonsis, a former AOL executive best known as the owner of the Washington Capitals and Wizards sports teams, was elected to American Express' board in July.
American Express is fighting a Justice Department lawsuit focused on the terms of its merchant contracts. Competitors MasterCard
While Fools should always do their own due diligence, and not blindly follow the insiders, insider buying can point to good places to look for opportunities.
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