C-Suite Buy of the Week: Unusual Insider Trading Trends as 2025 Approaches

Insider activity is a little lower than normal for this time of year. We usually see a flurry of buying near the end of the year as insiders bulk up their holdings in anticipation of strong results over the next year. This has not happened this year.

The ratio of insider selling to insider buying is at very high levels, as insider selling has been somewhat elevated. Although we rarely take signals from individual insider sales, the buying and selling activity ratio can usually be informative. At the moment, it is at a level that has often led to technical conditions I like to call “Market Fall Down, Go Boom.” That is not surprising given the strong rally this year encouraging insiders to take some profits.

That does not mean stocks will fall tomorrow. It means that caution and common sense should be your guide as you enter 2025.

While far more insiders have been selling than buying the past few weeks, some buying comes from the C-Suite that is worth discussing. The Chairman of Shoe Carnival SCVL, Warren Weaver, and his wife made a huge purchase of stock this past week, adding almost $10 million worth of stock to their already large holdings. The happy couple now owns over 4 million shares, or about 15% of the footwear retailer.

The retailer has been around since 1978 and is known for its entertaining shopping experience that includes interactive games that allow shoppers to win discounts and merchandise as prizes. The chain has grown to more than 370 stores across the United States and offers most major brands of athletic and casual shoes.

The market does not love the company right now as it fell short of revenue expectations, but this appears to be an overreaction. Although the results were impacted by the hurricanes that hit the southeastern United States and the slow back-to-school season, it was still able to meet Wall Street’s profit expectations. The stock is trading at low valuations of sales and profits despite strong growth expectations over the next several years.

In addition to the buying from the Chairman, the board decided to take advantage of the weakness in the stock as well. The company recently announced a $50 million stock buyback plan.

The CEO and the Chief Technical Officer at LendingTree TREE have both made six-figure open-market stock purchases this month. LendingTree is a game-changer in the world of personal finance.

Founded in 1996, this online platform revolutionized the way borrowers connect with lenders. Instead of going door-to-door or settling for whatever terms your local bank offers, LendingTree puts the power back in the hands of consumers. It’s a marketplace where you can shop for everything from personal loans and mortgages to credit cards and student loans without leaving your couch.

Here’s the beauty of their model: it’s all about choice and competition. LendingTree partners with a network of banks, credit unions, and alternative lenders to make them fight for your business. That means better rates, better terms, and much less hassle. And the best part? It’s free for consumers. The company makes money by charging lenders for access to this steady stream of motivated borrowers.

LendingTree doesn’t just stop at matchmaking. They offer calculators, tools, and financial education resources to ensure you’re making smart decisions with your money. Based in Charlotte, North Carolina, they’ve grown into one of the most trusted names in fintech by keeping their focus on simplicity, transparency, and, most importantly, the needs of the consumer.

The stock has pulled back well off the 52-week highs, but the people in the company appear quite confident the shares will resume their winning ways in 2025.

Both the CEO and CFO have taken advantage of the recent weakness in shares of Avadel Pharmaceuticals AVDL. Avadel Pharmaceuticals is a specialty pharmaceutical company focused on developing and commercializing innovative products that address unmet medical needs.

The company operates primarily in central nervous system (CNS) disorders and rare diseases. Avadel is best known for its flagship product, LUMRYZ, a once-nightly sodium oxybate formulation designed to treat excessive daytime sleepiness (EDS) and cataplexy in adults with narcolepsy.

Headquartered in Dublin, Ireland, Avadel leverages its proprietary drug delivery technologies to enhance existing therapies. These technologies aim to improve the pharmacokinetics, efficacy, and patient experience of medications, particularly in therapeutic areas where frequent dosing regimens or poor patient adherence are barriers to optimal care.

A wave of bad news including the resignation of the Chief Commercial Officer has sent the shares tumbling toward the 52-week low. The two top executives and at least one director are confident that the shares will recover from the decline and move higher.

There are some solid reasons to think they are correct. Avadel Pharmaceuticals is starting to hit its stride, and the numbers from the third quarter of 2024 tell the story. This company is laser-focused on LUMRYZ, and it’s paying off. With $50 million in net product revenue for the quarter, a massive leap from just $7 million in the same period last year, Avadel has captured the market’s attention.

There’s also been a major legal win. Jazz Pharmaceuticals tried to throw a wrench into the works, suing the FDA over its approval of LUMRYZ, but the U.S. District Court sided with Avadel. The approval stands, and the FDA’s determination that LUMRYZ is clinically superior to Jazz’s twice-nightly products remains intact. Add in Orphan Drug Exclusivity until 2031, and you’ve got a strong moat around this revenue stream.

Financially, the story keeps improving. Gross profit surged to $43.9 million from $6.9 million last year. Avadel ended the quarter with $65.8 million in cash, and while it opted not to draw on additional financing, its balance sheet still looks solid.

The growth trajectory is clear, and with Orphan Drug Exclusivity providing long-term protection, Avadel is building a business with real staying power. The CEO and CFO appear to think so and are backing their conviction with cash.