Recent research conducted at InsiderMonkey has shown that stocks bought by insiders tend to outperform market indexes. Although insider purchases alone are not enough to decide buying a stock, they can certainly provide good investment ideas. However, one must look into other elements, like the company’s fundamentals, valuation and institutional sponsorship in order to make a fine choice. Therefore, this is what we will do in this article: we will look into five mid-cap companies that have seen their insiders purchase their stock, and analyze other essentials in order to help you elucidate if they stand as attractive long-term investment options.
First in my list is Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). This $3.88 billion market cap biopharmaceutical company develops novel therapeutics based on RNA interference. On March 25th, Sanofi-Aventis, a Large Shareholder – which owns more than 10% of the company’s common stock, purchased 344,400 shares of the company for $66.88 per share. After spending more than $23 million in Alnylam’s stock, Sanofi holds (indirectly, via a wholly-owned subsidiary, Genzyme Corp.) more than 9.1 million shares of the biopharmaceutical company.
The other biotech company that witnessed high insider activity over March is Intrexon Corp (NYSE:XON)¸a $2.5 billion market cap synthetic biology company that designs, builds and regulates gene programs using its proprietary -and complementary- technologies. Over March, the company has witnessed three insider purchases.
On March 27th, the company’s CEO, Randal Kirk, bought some 243,000 shares of the company, for $25.72 per share. Through several holdings, Mr. Kirk owns more than 62.5 million shares of Intrexon’s stock, which makes him a more-than-10% owner. In addition, Ian Gregory Frost, Senior Vice President at the company’s Health Sector, started a position in the stock with 100,000, though three separate purchases made between Feb. 28thand March 4th. Amongst the 100,000 shares, 61,500 shares were procured between March 3rdand March 4th, for prices ranging from $24.56 per share to $26.15 per share, inclusive.
Oil & Gas Midstream
In the oil and gas midstream industry, two mid-cap companies experienced insider activity over the past month. The first one is Plains GP Holdings LP (NYSE:PAGP), a $3.7 billion market cap firm that, through its general partner Plains All American Pipeline, L.P. (NYSE:PAA), is engaged in the transportation, storage, terminalling and marketing of crude oil and refined products.
On March 13th, Victor Burk, a Board Director, started a position in the company with 3,000 shares. He paid prices ranging from $27.08 per share to $27.09 per share. His holding is valued at approximately $84,000.
Another oil and gas midstream company in our list is MPLX LP (NYSE:MPLX), a limited partnership recently formed by the Marathon Petroleum Corporation (to own, operate, develop and acquire crude oil, refined product and other hydrocarbon-based product pipelines and other midstream assets), with a market cap of more than $3.6 billion. Also on March 11th, an insider acquired stock from the company: Richard C. Wilson, Board Director, purchased 3,000 shares of the company at an average price of $49.42 per share. Following the reported transaction, the insider held 8,565 shares of the company, valued at more than $400,000.
And one U.S. Regional Bank
Finally, we would like to take a look at First Financial Bankshares Inc (NASDAQ:FFIN), a $2 billion market cap financial holding firm. Since the beginning of the year, the company has seen at least 12 insider purchases take place:
Johnny Trotter, one of the bank’s Board Directors, has been the most active insider this year. Starting on Jan. 31st, and through 8 different purchases, Mr. Trotter added more than 12,500 shares to his holdings (both direct and indirect holdings), having paid prices ranging from $59.40 per share, to $62.00 per share. In his most recent transaction, which took place on March 14th, he procured 7,100 shares of the company for $60.10 each, increasing his holdings to more than 195,000 shares of the company, valued at than $12 million.
Another active insider was Hamilton Murray Edwards, another Board Director. Between Jan. 29thand Feb. 3rd, he bought more than 1,500 shares of the company, for prices between $59.80 per share and $62.40 per share. He now owns about 75,000 shares of the firm.
Lastly, Ronald Giddiens (yet another Board Director), bought 49 shares of the company for $64.77 each, on Jan. 2nd.
Disclosure: Javier Hasse holds no position in any stocks mentioned