- Insider buying can be an encouraging signal for potential investors.
- Three specialty retailers saw notable insider buys this past week.
- Two top-level executives continued to build up stakes in their companies as well.
Conventional wisdom says that insiders and 10-percent owners really only buy shares of a company for one reason — they believe the stock price will rise and they want to profit. So insider buying can be an encouraging signal for potential investors, particularly during periods of uncertainty.
Here's a look at some notable insider purchases reported in the past week.
A director of Home Depot Inc HD last week acquired more than 16,800 of its shares at prices that ranged from $178.21 to $178.30 each. That cost him about $3 million. Note that earlier in the month, another director purchased more than $1 million worth of shares.
Jim Cramer still prefers this home improvement superstore operator to its rival Lowe's. Home Depot shares retreated about 4 percent during the week and ended last Friday at $171.80, handily below the director's purchase price range; the S&P 500 dropped more than 5 percent last week. Note that Home Depot shares have changed hands above $207 in the past year.
Tiffany & Co. TIF had two directors scoop up 30,000 shares combined of this luxury retailer last week. At prices ranging from $95.80 to $98.69 a share, those transactions totaled more than $2.92 million. Note that the transactions included unvested restricted stock units, and the stake of one of those directors is now listed at 400,000 shares.
The New-York-based company posted better-than-expected quarterly results this month. Shares closed on Friday at $95.94 apiece, still in the purchase price range. But the stock is down almost 10 percent year to date, despite holding its own in Friday's market sell-off. Shares have traded at more than $111 in the past 52 weeks.
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At Entercom Communications Corp. ETM, Chairman Emeritus Joseph Field has stepped up to the buy window again. At prices that ranged from $9.72 to $10, the 200,000 shares of this radio broadcaster that Field acquired in the past week cost him less than $1.99 million. Since the beginning of the month, Field has purchased 1 million shares.
Earlier this month, the Pennsylvania-based company posted quarterly results and announced a dividend. Its shares ended the past week more than 8 percent lower, closing on Friday at $9.25.. That was a new 52-week low and fell below the chairman's purchase price range. The 52-week high is at $14.53.
Advance Auto Parts, Inc. AAP saw President and CEO Thomas Greco acquire more than 8,600 shares of the Virginia-based specialty retailer. At an average per-share price of $115.77, the total for the purchase came to about $1 million. That brings Greco's stake to more than 135,000 shares.
Better-than-expected quarterly results back in February impressed analysts. The shares are still up more than 4 percent year-to-date and ended this past Friday's trading at $110.84 apiece, less than Greco's purchase price. The stock traded above $151 at one point in the past year.
Prospect Capital Corporation PSEC CEO John Barry added around 126,000 additional shares of this business development company at prices that averaged $6.50 apiece, for a total of more than $818,000. Note that Barry has been frequently buying batches of shares since mid-November, and that a director also purchased 1,000 shares last week.
Jim Cramer could not recommend shares of the New York-based company in a recent Lightning Round. At the end of this past week, the share price was $6.61, which was about 1 percent higher than a week earlier. The stock is more than 4 percent lower than at the start of this year, and the 52-week high is more than $9.
At the time of this writing, the author had no position in the mentioned equities.
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