Toyota Makes a Huge Insider Purchase

Toyota Motor Corp. (NYSE: TM) made a colossal purchase of shares in an air mobility company this week, making it a beneficial owner. However, it was not the only huge insider buying recently. A couple of industrial products makers, a biotech, and an investment firm saw insiders loading up on shares.

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.

The first-quarter earnings-reporting season is winding down, but some insiders are still 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.

Joby Aviation

• Buyer(s): 10% owner Toyota Motor
• Total shares: around 47.9 million
• Price per share: $5.03
• Total cost: about $250.0 million

This was the first tranche of a previously announced $500 million strategic investment by Toyota. It makes Toyota the largest shareholder of Joby Aviation Inc. (NYSE: JOBY), with a stake of more than 15%.

Shares of the Santa Cruz, California-based electric air taxi maker jumped about 25% on the news. Since a year-to-date low of less than $5 in April, the stock is up 45.4% and trading for well more than Toyota’s purchase price. The share price has overrun the consensus price target of $7.75, suggesting no additional upside until analysts update their targets. Just four of the nine analysts who cover the stock recommend buying shares.

Note that CEO JoeBen Bevirt and some other insiders have sold some shares this month.

TriMas

• Buyer(s): two directors
• Total shares: almost 843,000
• Price per share: $24.66 to $26.25
• Total cost: about $21.5 million

Industrial products producer TriMas Corp. (NASDAQ: TRS) attributed better-than-expected first-quarter results to a completed acquisition and recovering demand. The stock has gained 24.0% in the past month and was last seen above the buyers’ purchase range. However, the share price is 2.3% lower than a year ago.

One of the two analysts who follow the stock recommends buying shares, and that analyst reiterated its Buy rating after the earnings report. That analyst has a $40 price target, which signals 51.1% upside in the next 12 months.

Note that one of these directors bought the lion’s share of the shares, and that director also acquired 140,000 shares earlier this month. His stake is up to almost 1.9 million shares, making him a beneficial owner.

Middleby

• Buyer(s): a director
• Total shares: 137,000
• Price per share: $144.86 to $149.49
• Total cost: less than $20.3 billion

After acquiring more than $73 billion worth of Middleby Corp. (NASDAQ: MIDD) shares earlier in May, this director returned to the buy window. His stake is now up to almost 3.3 million shares.

The foodservice equipment producer recently posted mixed quarterly results, and it authorized share repurchases and said its planned spin-off remains on track. The stock was last seen trading within the purchase price range above after rising more than 9% since the report’s release. It outperformed the S&P 500 in that time.

Analysts anticipate the share price will gain 14.3% in the next 12 months to their consensus price target of $169.00. Five of nine analysts who cover the stock recommend buying shares.

Codexis

• Buyer(s): 10% owner Opaleye Management
• Total shares: more than 2.3 million
• Price per share: $2.36
• Total cost: almost $5.5 million

This Redwood City, California-based biotech company recently reported a first-quarter net loss and revenue that fell short of estimates. Codexis Inc. (NASDAQ: CDXS) also reaffirmed its full-year guidance.

The stock fell 15% after the report but mostly recovered, before retreating again in the past few days. The share price is slightly above the buyer’s purchase price but 21.9% lower than 90 days ago. At the start of the year, shares were trading for more than $5 apiece, and analysts anticipate the stock will rise 197.5% in the coming year to their consensus price target of $7.08. On average, analysts recommend buying shares.

The buyer’s stake is up to almost 12.0 million shares. Codexis has less than 83 million shares outstanding.

KKR

• Buyer(s): a director
• Total shares: 35,000
• Price per share: about $117.92
• Total cost: over $4.1 million

Despite economic uncertainty, New York-based investment firm KKR & Co. Inc. (NYSE: KKR) posted better-than-expected top-line and bottom-line quarterly results. The share price is 6.3% higher since the report and 3.4% higher than the purchase price above. The 52-week high is $170.40, well above the consensus price target of $143.20. That target still represents 24.1% upside in the next 52 weeks. All but one of 21 analysts who cover the stock recommend buying shares.

Note that another director also spent $1.5 million to acquire KKR shares earlier in May. The share price was around $113 back then.

And Other Insider Buying

In the past week, some insider buying was reported at Advanced Micro Devices, Avantor, Bausch + Lomb, Celanese, Energizer, Flowers Foods, Healthpeak Properties, International Flavors & Fragrances, PENN Entertainment, Phillips 66, Sensata Technologies, Sweetgreen, Valvoline, VFC, Wendy’s, and Xerox as well.

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