These 5 Insiders Are Buying During Market Chaos

Market volatility has spiked since the beginning of April, due largely to uncertainty about inflation, interest rates, upcoming quarterly reports, and mostly the impact of tariffs and a global trade war on the U.S. economy. Still, we have seen some notable insider purchases in the past week. A beneficial owner made a colossal purchase in what may be a takeover bid. Meanwhile, a couple of repeat buyers returned to the buy windows, and a relatively new chief executive affirmed his commitment to a specialty retailer.

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.

AllianceBernstein

• Buyer(s): 10% owner Equitable Holdings
• Total shares: less than 19.7 million
• Price per share: $38.50
• Total cost: almost $757.8 million

This transaction is part of a rumored takeover of AllianceBernstein Holding L.P. (NYSE: AB). This Nashville-based asset manager faces such headwinds as market volatility, economic uncertainty, and uncertainty about interest rates. The market sell-off has taken the share price to a year-to-date low near $33 on last look.

Analysts have a consensus price target of $39.25, which is less than the 52-week high of $41.37. Yet, their mean target price represents upside potential of 15% in the next 12 months. However, just two of six analysts who cover the stock recommend buying shares. BofA Securities downgraded the stock from Buy to Neutral last week.

Note that Equitable Holdings also acquired almost $24.6 million worth of AllianceBernstein shares back in November.

Victoria’s Secret

• Buyer(s): 10% owner BBRC International
• Total shares: 796,500
• Price per share: $18.15 to $19.39
• Total cost: over $14.2 million

Victoria’s Secret & Co. (NYSE: VSCO) recently posted solid fourth-quarter results but warned of near-term headwinds. The stock has trended downward since the beginning of the year, and this buyer returned to boost its stake to over 10 million shares, after also picking up almost $23.6 million worth last month.

This Ohio-based apparel retailer named a new chief financial officer back in January. Wall Street remains optimistic about the stock, given the consensus price target of $27.68. That now represents 75.3% upside in the next 12 months. However, only three out of 11 analysts who cover the stock recommend buying shares. Goldman Sachs recently maintained its Sell rating.

Edgewise Therapeutics

• Buyer(s): a director
• Total shares: over 496,700
• Price per share: $20.13
• Total cost: $10.0 million

Edgewise Therapeutics Inc. (NASDAQ: EWTX) is a clinical-stage biopharmaceutical company focused on muscular dystrophy. This transaction was part of a public offering of shares following an announcement of positive Phase 2 trial results.

The stock is now down over 56% since the beginning of the year and trading near a 52-week low below $11. The $42.78 consensus price target would be about a 303.6% gain from the current share price. Note that the low price target is just $14. Analysts on average recommend buying shares, though Scotiabank just downgraded the stock to Sector Perform.

Note that this buyer also picked up $9.9 million worth of shares of Sionna Therapeutics Inc. (NASDAQ: SION) last month.

Asana

• Buyer(s): CEO Dustin Moskovitz
• Total shares: about 449,500
• Price per share: $14.03 to $15.06
• Total cost: over $6.5 million

With its recent earnings report, San Francisco-based Asana Inc. (NYSE: ASAN) also 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 5% or so higher than the current price, which is below the purchase price range above.

Analysts see 20.2% 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 almost $7 million worth of shares the prior week, while two officers and a director were selling shares last month.

Petco Health and Wellness

• Buyer(s): CEO Joel Anderson
• Total shares: almost 1.6 million
• Price per share: $2.921 to $3.03
• Total cost: over $4.7 million

This San Diego-based retailer just announced a partnership with Uber. Petco Health and Wellness Co Inc. (NASDAQ: WOOF) also recently fell short of quarterly earnings expectations. Even with the recent market sell-off, this stock is still up about 14% in the past month. The share price is 47.6% higher than a year ago.

Given their consensus price target of $3.57 per share, analysts see 38.6% upside in the coming year. However, only three of 13 of them who cover the stock recommend buying shares. Goldman Sachs, RBC, and Wedbush recently maintained their Buy-equivalent ratings.

Note that Anderson has been chief executive for less than a year, taking up the reins last summer, so this share purchase affirms his commitment to the company.

And Other Insider Buying

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

• American International Group Inc. (NYSE: AIG) by a director for over $50,600
• APA Corp. (NASDAQ: APA) by a director for over $1.3 million
• Dollar Tree Inc. (NASDAQ: DLTR) by a director for over $520,800
• Salesforce Inc. (NYSE: CRM) by a director for almost $998,800
• Simon Property Group Inc. (NYSE: SPG) by directors for over $415,600
• Winnebago Industries Inc. (NYSE: WGO) by directors for over $293,800

Substantial Insider Buying: American Express, Asana, and More

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