Stock market downturns like the one we’ve experienced this month provide the perfect opportunity for investors to take advantage of depressed prices (the prices aren’t sad, don’t worry, they’re just lower) and buy shares at discounts to what they traded at just days earlier.
Company insiders are some of the savviest investors when it comes to taking advantage of such drawbacks in the shares of their companies and buying them at the most opportune moments, when they’ve likely hit rock-bottom. Basically, paying attention to these signals is good, so you should do it.
In this article, we’ll check out the recent insider buying at three companies whose shares have been battered and bruised recently and which can still be had for a sizable discount.
At Insider Monkey, we track insider trading and hedge fund activity to uncover actionable patterns and profit from them. We track over 600 of the most successful hedge funds ever in our database and identify only their best stock picks. Hedge funds are like many other companies in that they bundle products (in this case, stock picks) together and sell them to customers (investors) as a package deal. That means you get their 73rd-best pick along with their best pick, and who wants to pay exorbitant fees for a fund’s 73rd-best idea when you could instead invest in only their best ideas? Our newest quarterly stock picks were released this month, which investors can gain access to by becoming a subscriber to Insider Monkey’s premium newsletters.
Aimmune Therapeutics Inc (NASDAQ:AIMT)
Insider Buying Frenzy: Aimmune Therapeutics’ recent public offering allowed four different insiders to pounce on shares of the company, which is developing medications to combat food allergies. CFO Eric Bjerkholt purchased 3,125 shares, while Directors Kathryn Falberg, Mark Iwicki, and Patrick Enright purchased a total of 54,968 shares. All of the shares were purchased on February 26 for the public offering price of $32 each.
Aimmune Therapeutics Inc (NASDAQ:AIMT) Runway Extended to 2020: Thanks to the capital raised through the aforementioned public offering of 5.5 million shares, Piper Jaffray analyst Charles Duncan states that the company’s runway has been pushed to 2020, which will alleviate some of the pressure from the company’s ongoing trials of its intriguing peanut allergy treatment AR101.
AR101 Impresses in Phase 3 Study…: A recent phase 3 trial of AR101 successfully met its endpoint, with more than 50% of young peanut allergy sufferers being able to tolerate a 1,000 mg dose of peanut protein. It sucked to be the control arm in this case, as only 2.4% of the kids that were given placebos rather than AR101 tolerated the same dose of peanut protein.
…Until It Doesn’t: However, while shares surged by as much as 20% early on February 20 following the release of the trial data, they ended the day down and have fallen even further since. Investor worries appeared to swell over the drug’s safety, given that 2.7% of the study participants had a systemic hypersensitivity reaction to the drug. Several analysts have been shocked by the selloff, claiming the results were better than expected (much better in some cases).
Hedge Fund Ownership of Aimmune Therapeutics Inc (NASDAQ:AIMT): 17 hedge funds within Insider Monkey’s database of 663 active hedge funds were shareholders of Aimmune at the end of 2017, an increase of two since September 30, 2017.
On the next page we’ll look at two more companies with notable insider buying activity.