Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Ally Financial Inc. (ALLY) and Two Other Companies Receive Vote Of Confidence from Management and Board

The U.S. Securities and Exchange Commission requires all companies’ officers, Board members and shareholders owning at least a 10%-stake to disclose any purchases or sales of their companies’ shares. Insider Monkey strongly believes that the individuals running a company have a competitive edge over non-insiders when it comes to trading that company’s securities, so the investment community should pay close attention to heavy or noteworthy insider buying. However, retail investors should take notice of who is buying the shares, as Chief Executive Officers’ share purchases on the open market are far more informative and indicative of future performance than those conducted by hedge fund managers or activists (especially considering their recent underperformance). All in all, directors and executives generally buy shares of their company on the open market because they consider those shares attractively priced, or simply undervalued. That being said, this article will digest the recent insider buying witnessed at three companies, as well as discuss the recent performance of those companies.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

Executives and Board Members at ADMA Biologics Participate In Public Offering – Vote Of Confidence

To start with, ADMA Biologics Inc. (NASDAQ:ADMA) saw four different insiders purchase shares earlier this week. James Mond, Chief Scientific and Medical Officer, purchased 700 shares on Tuesday for $6.50 each, slightly lifting his holding to 3,389 shares. Chief Financial Officer Brian Lenz snapped up 2,500 shares on the same day at $6.50 apiece, which boosted his ownership to 8,500 shares. More importantly, President and Chief Executive Officer, Adam S. Grossman, bought a whopping amount of 200,000 shares on Tuesday, all of which are held indirectly through Areth LLC and Hariden LLC. After the recent purchase, the CEO holds an indirect ownership stake of 843,668 shares. Lastly, Director Jerrold B. Grossman, former CEO of ADMA Biologics on a part-time basis between 2007 to October 2011, filed Thursday to disclose the purchase of 45,769 shares at $6.50 apiece, all of which are held by the 2012 Nevada Trust.

Follow Adma Biologics Inc. (NASDAQ:ADMA)
Trade (NASDAQ:ADMA) Now!

The aforementioned members of management and Board of Directors purchased shares through an underwritten public offering of 1.89 million shares, so this cluster of buying is not the type of insider buying investors should look for. However, insiders’ participation in excess of 10% in the offering may point to their confidence in the future prospects of the late-stage biopharmaceutical company. ADMA Biologics Inc. (NASDAQ:ADMA) focuses on developing specialty plasma-based biologics for the treatment and prevention of certain infectious diseases.

The company’s lead product candidate, called RI-002, has been designed for the treatment of Primary Immune Deficiency Disease, a genetic disorder that causes a deficient or absent immune system. ADMA Biologics has completed a pivotal Phase III clinical study on this drug candidate, after which the company submitted a Biologics License Application (BLA) for RI-002 to the U.S. FDA during the third quarter. The FDA could approve the BLA within one year of the filing date, which means it could be approved by the end of this summer, with possible first commercial sales occurring starting from the fourth quarter. Dennis Purcell’s Aisling Capital owned 3.61 million shares of ADMA Biologics Inc. (NASDAQ:ADMA) on December 31.

Let’s head to the next pages of this article, where we will discuss the insider buying registered at Sterling Construction Company Inc. (NASDAQ:STRL) and Ally Financial Inc. (NYSE:ALLY).

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.