- Insider buying can be an encouraging signal for potential investors.
- Some insiders have taken advantage of recent sell-offs.
- Shares of one of these companies sank to a 52-week low last week.
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 from it. So insider
buying can be an encouraging signal for potential investors, particularly during periods of uncertainty.
Here's a look at a few notable insider purchases reported in the past week.
Aramark
Aramark Corporation (NYSE: ARMK) saw its
board chair, president and chief executive, Eric Foss, add to his stake this past week. At per-share prices of $32.21 to $32.72,
the more than 92,500 shares reportedly acquired cost him about $3.00 million. Another director also purchased 6,000 shares last
week for a total of more than $196,300, at an average of $32.72 apiece.
Investors day guidance was blamed for a plunge in Aramark's share price last week. The stock
ended the week at $32.08 per share, which was down more than 11 percent over that time. Shares have traded as high as $46.09
in the past year, and the consensus price target was at $43.69 on last look.
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Royal Caribbean
The Royal Caribbean Cruises Ltd (NYSE: RCL) board chair and CEO, Richard Fain, added 18,900 shares of this Miami-based
company to his stake this past week. The share price for this purchase, via family trust, ranged from $105.290 to $105.75, and the
transaction totaled more than $1.99 million.
The company launched a new ship and named a new director earlier this month. Shares closed Friday at $107.09, so the CEO's
purchase appears to be well-timed. The stock hit a 52-week low of $97.48 at the end of October, but it's still well down from the
multiyear high of $135.65 seen back in January. The consensus price target on the shares was last seen at $137.11.
Valero Energy
A director of Valero Energy Corporation (NYSE: VLO) also stepped up to the buy window this past week. He picked up a total of 25,000
shares at about $72.74 apiece. That cost him almost $1.82 million. That director's stake was listed most recently as more than
53,700 shares.
This refiner has underperformed relative to its peers since October. But the stock was trading at $73.30 a share on last look,
so this also looks like a well-timed buy. Shares were changing hands above $115 apiece just 90 days ago but sank to a 52-week low
of $71.48 last week. Note that the 17 analysts polled have a consensus price target still up at $117.00.
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