Insiders Are Loving These 5 Tech and Biotech Stocks

After struggling through a rough patch, the biotech industry seems to be staging a comeback. Several biotech firms have gone public this year, and those focused on obesity treatments, gene therapies, and more have high expectations. Insiders, especially beneficial owners, have been showing their love as well, and some of the largest insider purchases in the past week or so have been in biotech stocks.

In addition, a couple of tech companies have been feeling the love from insiders, including a work management software provider, that saw its outgoing chief executive make another big purchase of shares. Directors at a utility loaded up on shares as well. Let’s take a quick look at these notable transactions of the past week or so.

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.

Note that the next earnings-reporting season will begin soon, and many insiders will be 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.

Aeva Technologies

• Buyer(s): 10% owner Sylebra Capital
• Total shares: more than 5.8 million
• Price per share: $4.36 to $6.77
• Total cost: over $34.5 million

Shares of Aeva Technologies Inc. (NYSE: AEVA) surged following a better-than-expected fourth-quarter report. This maker of components for drones, robotics, and vehicles also recently named a new board of directors member.

The stock is up almost 150% since the earnings report and has hit a new 52-week high above $7 a share, above the buyer’s purchase price range. The share price is more than 75% higher than a year ago, but still well below an all-time high of more than $100 a share. The share price has also overrun Wall Street’s consensus price of $6.54. Until analysts update their price targets, no upside potential in the next 12 months is indicated. However, four of five analysts who cover the stock recommend buying shares.

After these transactions, Sylebra Capital’s stake is up to 16.2 million shares. Aeva has less than 55 million shares outstanding. Also note that Sylebra has lately been parting with shares of software company 8×8 Inc. (NASDAQ: EGHT).

Global Water Resources

• Buyer(s): two directors
• Total shares: more than 1.4 million
• Price per share: $10.00
• Total cost: nearly $14.4 million

These insiders took advantage of a public offering of Global Water Resources Inc. (NASDAQ: GWRS) shares meant to fund acquisitions and for working capital. Shares of the Phoenix-based water resource management company were last seen changing hands for more than the offering price, though they dipped to a 52-week low of $9.79 after the offering was announced.

Analysts anticipate nearly 60% upside in the next 52 weeks to their consensus price target of $16.50 a share. Both of the analysts who follow the stock recommend buying shares, one of them with a Strong Buy rating.

Despite bouncing back somewhat from the recent low, the stock is down more than 9% since a disappointing quarterly report last month. The share price is over 17% lower than a year ago.

Surrozen

• Buyer(s): 10% owner Column Group III GP
• Total shares: over 1.0 million
• Price per share: about $11.54
• Total cost: about $12.0 million

Surrozen Inc. (NASDAQ: SRZN) is a clinical-stage biotechnology company focused on retinal tissue repair and regeneration. It just landed a $175 million financing deal to advance its pipeline.

The San Francisco-area company just posted its fourth-quarter results and business update, and the share price popped over 10% afterward. The stock is also down over 14% since the beginning of the year. The $38.50 consensus price target would be about a 230% gain from the current share price. The high price target is up at $45. Two analysts follow the stock, and both recommend buying shares.

Note that the buyer also picked up some shares of Tenaya Therapeutics Inc. (NASDAQ: TNYA) last month.

Benitec Biopharma

• Buyer(s): 10% owner Suvretta Capital Management
• Total shares: 900,000
• Price per share: $13.00
• Total cost: $11.7 million

This development-stage biotechnology company is engaged in the advancement of novel genetic medicines. Benitec Biopharma Inc. (NASDAQ: BNTC) also had an offering of stock intended to finance the continued development of its product candidate programs. It also reported positive trial results last month.

The stock hit a 52-week high of $16.90 after the clinical results were posted. They pulled back afterward and were last seen down more than 2% year to date, as well as lower than the buyer’s purchase price. However, analysts see plenty of room for shares to run in the coming year to their mean price target of $25.43. Their consensus recommendation is to buy shares.

Note that the buyer last acquired shares of Benitec in December, and its stake now is up to about 8.8 million shares.

Akero Therapeutics

• Buyer(s): a director
• Total shares: 200,000
• Price per share: $43.01 to $44.75
• Total cost: almost $8.8 million

Akero Therapeutics Inc. (NASDAQ: AKRO) is a clinical-stage biopharmaceutical company also based near San Francisco. Shares soared earlier in the year on news of positive trial results for a liver disease treatment.

The stock has trended downward since but is up 49% or so year to date. The share price is less than the purchase price range above, though. But the consensus price target of $77.64 suggests there is upside of more than 95% in the next 12 months. All 12 analysts who follow the stock recommend buying shares.

Note that the buyer picked up more than $9 million worth of shares back in December, and its stake now is up to 1.2 million shares

Asana

• Buyer(s): CEO Dustin Moskovitz
• Total shares: 450,000
• Price per share: $14.96 to $15.48
• Total cost: over $6.8 million

With its recent earnings report, San Francisco-based Asana Inc. (NYSE: ASAN) recently announced Moskovitz’s retirement. The share price plunged afterward and has yet to recover. The stock is down over 21% in the past month. A year ago, the price was 2% or so higher than the current price, which is within the purchase price range above.

Analysts see little upside in the coming year, given their $15.63 consensus target price. Out of 19 analysts who cover the stock, only five of them recommend buying shares. J.P. Morgan recently reiterated its Underweight rating, and Morgan Stanley maintained an Equal Weight rating.

Note that the outgoing chief executive bucked the trend, also acquiring more than $18 million worth of shares the prior week, as two officers and a director were selling shares last month.

And Other Insider Buying

In the past week or so, some insider buying was also reported at:

• NetApp Inc. (NASDAQ: NTAP) by a director for about $500,000
• Signet Jewelers Ltd. (NYSE: SIG) by the CEO for over $861,700
• Victoria’s Secret & Co. (NYSE: VSCO) by a 10% owner for almost $4.1 million

Substantial Insider Buying: American Express, Asana, and More

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