Two Healthcare Stocks That Insiders Are Buying

Over the past couple of days, the healthcare sector has witnessed plenty of insider activity, which should not be overlooked. In this article, I will examine two companies in this segment..

First off is Owens & Minor, Inc. (NYSE:OMI), a $2.1 billion market cap Fortune 500 company that provides third-party logistics (3PL) services to manufacturers and suppliers of healthcare and life-science products. On May 7th, Richard Meier, Executive Vice President and Chief Financial Officer, acquired 2,500 shares of Common Stock for $32.50 per share. Following this transaction, Mr. Meier holds 40,566 shares of the company, worth more than $1.3 million.

On top of Mr. Meier’s bullishness, more than a dozen major hedge funds hold long positions in the stock. The largest hedge fund shareholder, Chuck Royce’s Royce & Associates, holds 1.83 million shares of the company. Joel Greenblatt (Gotham Asset Management) also seems to feel confident about the company’s future, as he last increased his stakes by 69% to 373,228 shares (in Q4 2013). Similar is Ken Griffin, David Dreman and Mario Gabelli´s case: they all declared having added shares of the company to their portfolios over the last quarter that they reported.

Despite the positive sentiment amongst insiders and funds, analysts do not seem to like this company. In spite of Owens & Minor’s above average margins and return on assets, coupled with a cheap valuation, most analysts rate the stock as a “hold” or “underperform” case, and expect it to deliver average annual EPS growth rates around 9% over the next five years –compared to an industry mean of 14%-15%.

Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR)

The second healthcare company I would like to refer to is Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR), a $976 million market cap biopharmaceutical company focused on the development and commercialization of its product, lomitapide. Opposite to Owens & Minor, Aegerion does not look good on paper. While it boasts negative margins and returns, it still trades above the biotech industry average valuations. However, analysts seem to love the stock, and recommend buying it. Consensus estimates point towards average annual EPS growth rates around 1,253% over the next five years.

In addition to analysts, both hedge funds and insiders seem to feel bullish about this stock. On Thursday May 8th, Marc D. Beer, Chief Executive Officer, acquired 30,000 shares of Common Stock for prices ranging from $34.64 to $35.35 per share, inclusive. He now holds 33,000 shares directly, and another 246,462 shares, indirectly. Moreover, the two largest hedge fund shareholders, Andreas Halvorsen´s Viking Global, and Arthur B Cohen and Joseph Healey Healthcor Management Lp, have been increasing their stakes at the company. The latter doubled its bets over the last reported quarter, to 850,000 shares; Viking Global increased its holdings by 18%, to 881,333 shares.

 

Disclosure: Javier Hasse holds no position in any stocks mentioned

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Bloodiest UFC Fights Ever Fought

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!