Insider trading based on material non-public information is illegal. But recent prosecutions indicate that insider trading is rampant on Wall Street. Luckily, ordinary investors can benefit from these activities simply by imitating the purchases of corporate insiders. Academic studies have shown that imitating insider purchases is profitable, especially when there are several insiders buying around the same time.
Below we compiled a list of healthcare stocks that insiders are bullish about. All companies have at least $2 billion market cap and were purchased by at least one insider in the past month. The market data is sourced from Finviz.
|EW||Edwards Lifesciences Corp.||1|
|BSX||Boston Scientific Corporation||3|
|UTHR||United Therapeutics Corporation||1|
|SIRO||Sirona Dental Systems Inc.||4|
Celgene Corporation (CELG): Celgene is a global biopharmaceutical company. CELG was bought by one insider during the past month. On December 5, Ernest Mario bought 1000 shares at $61.4 and another 1000 shares at $61.3. Mario also bought 2000 shares at $63 on November 2. It seems Mario knows when to purchase the stock as CELG is now trading at $66.85 per share. Bill Miller’s Legg Mason Capital Management had $154 million invested in CELG.
Stryker Corp. (SYK): Stryker is a medical technology company. SYK was bought by one insider during the past month. Roch Doliveux bought 1000 shares at $47.01 on November 21. SYK’s price increased more than $2 per share in one month. The stock is trading at $49.62 per share today. Earlier in August, another director Allan Gloston also bought 500 shares at $46.9852. Steven Cohen’s SAC Capital Advisors had $33 million invested in SYK at the end of September.
Perrigo Co. (PRGO): Perrigo develops, manufactures and distributes over-the-counter and generic prescription pharmaceutical products. PRGO was bought by one insider during the past month. Thomas Farrington purchased more than 2000 shares at $98.38 per share on December 12. Now the stock is trading at $100.96 per share. In August, Farrington sold over 8000 shares of PRGO in total at prices ranging from $88.861 to $96.271. Chuck Royce is also bullish about PRGO. His Royce & Associates reported to own $86 million of PRGO as of September 30.
Edwards Lifesciences Corp. (EW): Edwards Lifesciences provides products and technologies that treat advanced cardiovascular disease. EW was bought by one insider during the past month. On November 29, Barbara McNeil purchased 158 shares at $63.78. Now the stock is trading at $70.22 per share, returning over 10% since November 29. Louis Navellier also invested $31 million in EW. Columbus Circle Investors had $37 million in EW at the end of September.
Boston Scientific Corporation (BSX): Boston Scientific Corporation develops, manufactures and markets medical devices globally. BSX was bought by three insiders during the past month. On November 29, Nj Nicholas purchased 10000 shares at $5.56. BSX is currently trading at $5.26 per share, slightly lower than the price Nicholas bought at. Nicholas also purchased 30000 shares of the stock in total at around $6.67 per share in May. BSX was trading above $7.25 per share in July. On November 28, Ernest Mario and Katharine Bartlett bought 100,000 shares and 8000 shares respectively at around $5.4 per share. Mario also bought 25000 shares at $5.3 on November 21 and 50000 shares in total at around $5.5 per share in October. Similar to Nicholas, Mario bought the stock in May as well. He purchased 2500 shares at $6.72 in mid May. Insider purchases in BSX sends “strong buy” signals and outsiders can imitate insiders without paying a premium in this case. Omega Advisors had nearly $100 million in BSX at the end of the third quarter.
Other healthcare stocks insiders are buying during the past month include United Therapeutics Corporation (UTHR), Techne Corp (TECH), and Sirona Dental Systems Inc (SIRO). The strongest buy signal comes from SIRO as four insiders purchased shares during the past 30 days. Investors should also keep in mind that insider trading in smaller companies are generally more profitable. Nevertheless, they have to research these names carefully as sometimes insiders try to trick the investors by making coordinated small purchases.