A trio of insiders did something very unusual last week. They bought their company stock.
We call it a change of heart when insiders sell, sell, sell, and then suddenly buy. It’s like the Muppets Sesame Street “One of these Things [is not like the other]” skit where they show something like three sets of sneakers and a backhoe. You notice the backhoe because, well, it is so different from the sneakers that you cannot look away.
BioAtla, Inc. (BCAB)
BioAtla Chief Executive Officer (CEO) PhD, Jay Short recently purchased 69,390 shares of the emerging biotech company at $2.86 per share for an investment of $198,366. Prior to his June 21st purchase, the CEO sold BCAB stock a half-dozen times, collecting nearly $11.9 million since this time last year. (1) Short started selling at $40.06 in June 2021 and kept on pressing the sell button through December 2021 for as little as $23.48 per share. BCAB trades at $3.55 as we type.
Short could be handsomely rewarded with substantial upside as the Wall Street’s one-year target price is $31.00. (2) As outlandish as that may seem, BCAB’s 52-week high is $47.85 with a low of $2.01.
BioAtla is a clinical-stage biopharmaceutical company that develops a novel class of highly specific and selective antibody-based therapeutics for the treatment of solid tumor cancers. Their conditionally active biologics, (CABs) target known and widely validated tumor antigens that have previously been difficult or impossible to target. BCAB’s approach is to identify the necessary targeting and potency required for cancer cell destruction, while aiming to eliminate or greatly reduce on-target, off-tumor toxicity, one of the fundamental challenges of existing cancer therapies.
IPG Photonics Corporation (IPGP)
June 16, 2022 must have felt strange for IPGP Chief Financial Officer (CFO) Timothy Mammen. He bought 3000 shares of IPGP that day at $83.54, spending a touch more than a quarter-million dollars. Submitting a buy ticket was Joe DiMaggioesque, breaking a streak of 56 consecutive sells dating back nearly 14 years. All-in-all, Mammen sold 545,283 shares for almost $35 million. (3)
The technology company is another with attractive upside according to analysts’ consensus price target of $150.25. (4)
IPG Photonics Corporation is in the S&P 500. The company is a leader in high-power fiber lasers and amplifiers used primarily in materials processing and other diverse applications. The Company’s mission is to make its fiber laser technology the tool of choice in mass production. IPG accomplishes this mission by delivering superior performance, reliability, and usability at a lower total cost of ownership compared with other types of lasers and non-laser tools, allowing end users to increase productivity and decrease costs.
Microchip Technology Incorporated (MCHP)
Ok, Microchip Technology Chief Executive Officer Ganesh Moorthy is not exactly like the other two we’ve spotlighted. Moorthy bought MCHP twice before, both times very profitably. Way back in 2003 as a Vice President, Moorthy bought 1000 shares at $19.28.
Starting in December 2010, he sold 20,000 shares at $35.35. The CEO went on to sell 18 times in a row, banking north of $14 million. In 2018, while serving as the Chief Operating Officer (COO), he reversed course and added 12,000 MCHP shares to his portfolio at $84.10. The bullish spirit didn’t last too long as he sold 12,000 shares in June 2020 for $106.72, pocketing a profit of $271,400 in 22 months. Now, as CEO, he is back in the buy column with 8000 shares at $57.29 for $458,301. (5)
So far, Moorthy has been on the right side of the trade each time he had a change of heart. Of course, past performance is no guarantee of future success. Legalese aside, Wall Street believes he could be right again with a 12-month price target of $84.53 for the chipmaker. (6)
Microchip Technology Incorporated is a leading provider of smart, connected, and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduce risk while lowering total system cost and time to market. The company’s solutions serve more than 120,000 customers across the industrial, automotive, consumer, aerospace and defense, communications, and computing markets.
A change of heart is one of our favorite insider-buying criteria. It’s not foolproof, but it’s our opinion that flipping from a habitual seller to a buyer is an indication the current stock price is seen as a value by the insider. Based on their one-year price targets, it appears Wall Street agrees.
1 – https://www.secform4.com/insider-trading/1205375.htm
2 – https://finance.yahoo.com/quote/BCAB?p=BCAB
3 – https://www.secform4.com/insider-trading/1378546.htm
4 – https://finance.yahoo.com/quote/IPGP?p=IPGP
5 – https://www.secform4.com/insider-trading/1218184.htm
6 – https://finance.yahoo.com/quote/MCHP?p=MCHP&.tsrc=fin-srch