Insiders are people who have access to private information about a company and can do something called insider buying. They include a company’s senior management, members of the board of directors and other important employees.
There have been many times that insiders have used this information to profit at the expense of others. For example, if an insider knows that bad news will come out and drive the shares lower, they could sell their shares to someone who is unaware. And if the news is good and will result in a rise in price, an insider can also buy shares from an investor who doesn’t have access to this information.
In order to prevent this type of unethical and illegal behavior, financial regulators have established certain rules and regulations. One is that if an insider buys or sells their company’s stock, they must disclose it to the public. This information can help regular investors find profitable investments.
For example, if the share price of a company has declined and the insiders start to buy, it could be a sign that they believe the selling is overdone.
As such, this list covers stocks that have seen significant insider buying lately. That makes them worth keeping on your radar.
- Rhythm Pharmaceuticals (NASDAQ:RYTM)
- Cyclo Therapeutics (NASDAQ:CYTH)
- Agile Therapeutics (NASDAQ:AGRX)
- Checkmate Pharmaceuticals (NASDAQ:CMPI)
- Gold Resource (NYSEAMERICAN:GORO)
- William Penn Bancorp (NASDAQ:WMPN)
- Windtree Therapeutics (NASDAQ:WINT)
Stocks with Insider Buying: Rhythm Pharmaceuticals (RYTM)
Rhythm Pharmaceuticals is a commercial-stage biopharmaceutical company. Its focus is on the development and sale of therapeutics for the treatment of “rare genetic diseases of obesity.” Rhythm was founded in 2008 and is based in Boston, Massachusetts.
As you can see from the above chart, RYTM stock almost reached $40 a share in January. Then it went into a steady decline. Now, it trades at around $21 per share.
However, David Meeker — the president and CEO of the company — must believe that the stock will rebound. On Mar. 31, he reported buying 10,000 shares at an average price of $20.17. This case of insider buying is a personal investment of over $200,000.
Wall Street also thinks that the shares are currently undervalued. According to Tipranks, six analysts following the company give it a consensus rating as a strong buy. The average target price is $49.40. That’s more than double the price RYTM is currently trading for.
Cyclo Therapeutics (CYTH)
Cyclo Therapeutics is another biotechnology company on this insider buying list, this time a clinical-stage one. It develops cyclodextrin-based products for the treatment of various diseases. Formerly known as CTD Holdings, Cyclo changed its name in late 2019. However, the original company was actually founded in 1990.
As you can see on the chart above, like many biotech companies, shares of CYTH stock are extremely volatile. But, over the past year, the trend has been lower. Last April, shares traded around $18 a share. Now they are trading between $7 and $8.
That said, the insiders of this company think now is a good time to get in on CYTH. Jeffrey Tate is Chief Operating Officer. On Mar. 30, Tate filed a form with the U.S. Securities and Exchange Commission (SEC) saying he bought 2,000 shares at $7.50 a share. On the same day, another insider — Markus Sieger, a director — bought 10,000 shares at $8.10 apiece. Francis Ostronic, another director, also bought a total of 3,000 shares on the same day.
Agile Therapeutics (AGRX)
Agile Therapeutics (AGRX) is a women’s healthcare company that researches, develops and commercializes prescription contraceptive products.
As you can see on the above chart, since the middle of February, the price of AGRX stock has declined from around $3.60 to current levels touching $2.
However, three insiders have decided to take advantage of this weakness by making significant personal investments and engaging in insider buying. According to forms filed with the SEC, between Mar. 23 and Mar. 29, they acquired a total of 72,500 shares. They each paid around $2 a share.
According to Tipranks, four analysts following Agile believe it is undervalued as well. The consensus rating is a strong buy. The average target price is $8.25. That is four times higher than where shares are currently trading.
Checkmate Pharmaceuticals (CMPI)
The next name on this insider buying list is yet another pharma company. Checkmate Pharmaceuticals is a clinical-stage biotechnology company that develops and sells therapeutics for cancer.
Shares of CMPI stock declined from around $15 to about $11 recently. This was a decline of more than 25%.
However, this didn’t phase Arthur Krieg, the Chief Scientific Officer at Checkmate. He must believe the selling is an overreaction. Recently, Krieg made a significant personal investment. Between Mar. 26 and Mar. 30, the officer bought a total of 46,740 shares.
On Tipranks, only one analyst follows Checkmate, but they consider CMPI stock undervalued. The average target price is $19. That’s over 75% higher than the current share price.
Gold Resource (GORO)
Gold Resource is a company that mines and sells gold and silver mainly out of Mexico. It also explores and mines copper, lead and zinc deposits. The company was founded in 1998 and is headquartered in Colorado.
The gold trade isn’t working out for most investors right now. Many experts have advised to buy gold lately because they thought that the recent government stimulus package would lead to inflation. This would potentially result in the price of gold moving higher.
Maybe it still will. But since August, the price has declined from around $2,000 to $1,740 an ounce today. This has caused the price of gold stocks to decline, as we have here with GORO stock.
Like we’ve seen with other cases of insider buying, though, Ronald Little is a director at GORO and must believe things will turn around soon. Between Mar. 19 and March 29, Little bought a total of 40,000 shares.
According to Tipranks, one analyst covering GORO stock has it rated as a buy with a target price of $5.25. That is more than 80% higher than the current price.
William Penn Bancorp (WMPN)
Next up on this list of insider buying stocks is William Penn Bancorporation, the holding company for William Penn Bank.
The company recently announced that it would be offering more shares to the public. This caused the stock to plummet. As you can see on the above chart, the share price fell from $38 to current levels around the $11.40 mark.
However, insiders are taking advantage of this recent selloff. Between Mar. 26 and Mar. 31, a number of insiders bought significant amounts of stock.
Of course, this small company isn’t currently followed on Wall Street’s radar screen. None of the big research firms cover it. But that doesn’t count WMPN stock out as an investment.
After all, some investors like buying stocks of companies that aren’t covered by the Street. They think that if the company is successful and gets “discovered” by Wall Street, it will boost the price of the shares. Maybe the insiders think that could happen here.
Windtree Therapeutics (WINT)
Last up on this list of insider buying stocks, Windtree Therapeutics is a biotechnology and medical device company that’s focused on products and treatments for acute pulmonary and cardiovascular diseases. Formerly known as Discovery Laboratories, WINT changed its name in 2016. However, the original company was incorporated in 1992.
Over the past year, shareholders of WINT stock haven’t had much to be happy about. The bears have been in control of it. As you can see on the chart, the share price has steadily declined from around $10 a year ago to current levels close $2.50.
But James Huang, a director of the company, must think that the selling is overdone. Huang seems to be expecting a rebound. On Mar. 31, he bought 150,000 shares at an average price of $2.36 a share. This was a personal investment of over $350,000.
On the date of publication, Mark Putrino did not have any positions (either directly or indirectly) in any of the aforementioned securities.