Insider buying is slowing to a snail delivering bad news pace, at least according to how iStock measure it. Executives and directors filed purchase records at just 93 publicly traded companies.
The fall off matches the dip in consumer confidence reported by the University of Michigan survey reported last week. Hopefully, a couple of green days from the stock market and the first quarter's earnings results will cheer things up in boardrooms and living rooms in the weeks to come.
Despite the shallow pool, we still find insider buying ideas of interest. This week, we are going to highlight Novavax, Inc. (NASDAQ:NVAX).
[Related -Novavax, Inc. (NVAX): Insider Buying News You Can Use]
Novavax is a clinical-stage biopharmaceutical company focused on developing recombinant protein nanoparticle vaccines to address a range of infectious diseases. The company's technology platform is based on proprietary recombinant vaccine technology that includes virus-like particles (VLPs) and recombinant protein micelle vaccines. Its vaccine candidates target seasonal influenza, pandemic (H5N1) influenza, and respiratory syncytial virus (RSV).
One of our favorite insider buying markers is cluster buying. That's when multiple executives and directors at the company decide to buy at the same time. Last week four members of the NVAX team bought a total of 90,000 shares valued at $392,199, which puts the dollar cost average of the purchases at $4.36; slightly lower than today's price.
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In addition to cluster buying, iStock is a fan of insiders getting it right. In other words, they buy low and sell high. Each member of the quartet of insiders bought NVAX shares previously. In the past two years, the team combined for seven purchases. As we mentioned, we like it when insiders get it right, six of the seven earlier trades were profitable in short order.
Which executive team members are buying is important, too. If you had to pick the most important, iStock would go with the CEO and the CFO. One runs the company while the other knows the financials better than anybody else.
Chief Executive Officer, Stanley C. Erck bought 10,000 shares at $4.27 per share last week. In January 2014, Erck bought 11,868 shares at $2.29 per -bet you wish that you followed him them.
Chief Financial Officer, Barclay A. Phillips joined the CEO last week buying 5,000 shares at $4.25. Phillips has taken two previous bites at the NVAX apple: 50,000 shares at $1.90 in June, 2013, and 9,868 shares at $2.29 in January of this year.
As you can see, the men in the right positions have gotten it right, so far at least.
Bottom fishing is another quality we find attractive when examining insider buying. At the end of February, NVAX was pressing its 52-week high of $6.95. As you can tell, the stock has fallen since, and the four insiders appear to have picked or set the near-term bottom with their purchases. Other than earnings, we found no other news that impacted the stock price beyond the recent selloff for anything biotech related of late.
In fact, shortly after earnings were announced, research firm, Ladenburg upped their price-target for NVAX to $10. We can think of four people who hope Ladenburg is correct.
Overall: Cluster insider buying, previously getting it right, and bottom fishing from four Novavax, Inc. (NASDAQ:NVAX) insiders are encouraging. However, it could be a bumpy ride as Novavax's pipeline is in various phase I and phase II clinical trials with the FDA, which means NVAX shares will be FDA news dependent until approvals.
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