Part of these rules that the SEC has created over the years include measures that prevent insider buying from taking advantage of nonpublic information. This type of insider trading is illegal. Insiders are people that have access to confidential information about a company. Some of this information may move the price of the company’s stock. For example, if they know the company is about to announces earnings that are lower than estimated, the insiders could secretly sell their shares or buy put options.
Because of this the SEC requires that insiders inform the public if they buy or sell their company’s stock. This means that us outsiders can find out when the insiders are buying. This could be a great indication that buying the stock may be a good idea. This is especially the case if the price has recently made a large move downward.
This is because there are many reasons why a company insider may decide to sell stock. They may need to raise money to buy a home or to pay a college tuition. But there is only one reason why an insider would buy more stock: money!
They believe that the stock will go higher and that it is a good time to buy it.
There has been significant insider buying in these companies over the past week.
Insider Buying: Ligand Pharmaceuticals (LGND)
Ligand Pharmaceuticals (NASDAQ:LGND) is a biopharmaceutical that develops or buys technologies that help other companies create new medicines.
Ligand just reported second quarter earnings that beat estimates. They came in at 68 cents per share, which was 7 cents better than what the Street looking for.
Despite this, the stock was hit hard because investors were concerned with some of the guidance the company gave with regards to the status of some customer contracts.
John Higgins is the CEO of Ligand. Apparently, he disagrees with these sellers. He just invested $175,000 when he paid $95.45 for 1,850 shares.
Jason Aryeh is a Director of the company. He also made a significant investment. He bought 4,000 shares at an average price of $99.22.
W.R. Grace & Co (GRA)
W.R. Grace & Co (NYSE:GRA) produces and sells chemicals and materials.
GRA just reported quarterly earnings that beat estimates. They came in at $1.16 a share, 2 cents better than what analysts were looking for.
Despite this, over the past month the share price has dropped by over 10%. This probably has more to do with equity markets selling off than it has to due with anything specific to Grace.
Hudson La Force is the President and Chief Executive Officer of W.R. Grace. He must believe that the stock will rally from these levels. He just made a personal investment of $275,000 into the company when he bought 4,000 shares at $69.04.
Merit Medical Systems Inc (MMSI)
Merit Medical Systems Inc (NASDAQ:MMSI) manufactures and sells disposable medical devices.
Merit just reported second quarter earnings of 42 cents a share. Wall Street was looking for 50 cents. Revenues were light as well, coming in at $255.5 million while estimates were for $259 million.
Shareholders were not happy. They knocked the stock down $15.
Ronald Frost is the Chief Operating Officer of the company. He must believe that the stock is attractive after this selloff because he just invested $200,000. He bought 5,000 shares at an average price of $40.
Comfort Systems USA Inc (FIX)
Comfort Systems USA Inc (NYSE:FIX) is involved with HVAC and plumbing and other mechanical services.
The company just missed estimates when it reported quarterly earnings of 65 cents a share. Analysts were looking for 86 cent a share. As a result the price of the stock dropped by about $10.
Insiders are taking advantage of this selloff to buy shares. William George is the Chief Financial Officer. He just paid $41.39 for 2,500 shares.
Franklin Myers is the Chairman of the Board. He must also believe that the stock is a good value at these levels. He just made a $230,000 investment when he bought 5,500 shares at $41.89.
USA Truck Inc (USAK)
USA Truck Inc (NASDAQ:USAK) not surprisingly, is a trucking company.
Over the past year the price of USAK stock has lost almost two thirds of its value. At this time last year, it was trading around $22 per share. The most recent close was $8.42.
Some of the insiders of this company have been buying the stock. They must be sick of watching the price drop and must believe that it is a good buy at these levels.
The largest of these insider purchases was made by Jason Bates. He is the Chief Financial Officer of the company. He just paid $8.40 for 15,000 shares. This is an investment of $126,000.
Everest Re Group LTD (RE)
Everest Re Group LTD (NYSE:RE) is a holding company that is in the insurance and reinsurance industry.
Shares of Everest RE recently sold off after the company report its most recent quarters earnings. This is because despite beating earnings estimates, revenues were less than expected.
Two insiders have just made significant purchases of the company’s stock. Meryl Hartzband is a Director of the company. This insider just bought 500 shares at $242.31, a $120,000 investment.
John Graf is also a Director of the company. He just invested $250,000 of his personal funds when he paid $244.35 for 1,020 shares.
Spirit Airlines Inc (SAVE)
Spirit Airlines Inc (NYSE:SAVE) is an airline that offers discounted travel prices to customers.
The stock dropped for around $54 to current levels around $42 when the company reported its second quarter earnings. Some of the company insiders believe that those who sold the stock down were making a mistake.
Gardner McIntyre is a Director of the company. He just made an investment of $105,000 when he paid $41.92 for 2,500 shares.
Edward Christie is the President and CEO of Spirit Airlines. He just made a significant personal investment as well. He bought $100,000 worth of stock when he purchased 2,375 shares at an average price of $41.93.