Massive Insider Buying Witnessed at 3 Companies, Including This Fresh Acquisition Target

Patriot National Inc. (NYSE:PN) has had four different insiders purchase shares this month, a cluster of insider buying that is definitely worthy of closer inspection. To begin with, Director John R. Del Pizzo bought 9,000 shares on Thursday at $6.58 apiece, enlarging his overall holding to 120,865 shares. Judith L. Haddad, Executive Vice President, Chief Information Officer and Chief Technology Officer, snapped up 2,500 units of common stock last Monday at a cost of $6.25 per share, which lifted her ownership to 77,500 shares. On March 3, Director Charles H. Walsh acquired a 50,000-share block for only $4.06 per share, boosting his equity investment in the company to 70,894 shares. More importantly, Chairman, President and Chief Executive Officer Steven M. Mariano reported buying 60,000 shares last week at prices that ranged from $6.13 to $7.00 per share. In February, Mr. Mariano transferred 691,928 shares from the Steven M. Mariano Trust to a corporation that he controls, while an additional 43,553 shares owned directly by the CEO were transferred to that same corporation yesterday. After these transactions, Mr. Mariano holds a direct ownership stake of 12.02 million shares, as well as 1.81 million shares held through the aforementioned corporation and 626,428 shares held via the Steven M. Mariano Trust.

Patriot National is a national provider of technology-enabled insurance and employer solutions within the workers’ compensation marketplace for insurance companies, employers and other entities. The company’s gross reference premium written, which refers to the aggregate premium written by or for the company’s insurance carrier partners, totaled $470.24 million for 2015, up from $335.14 million in 2014. The increase was mainly driven by an increase in Guarantee Insurance gross reference premium written, as well as the inception of new contracts with Scottsdale, American International Group Inc (NYSE:AIG), and other insurance carrier clients. Most of the company’s services, such as background checks, fraud investigation and healthcare cost containment, have become somewhat mandatory by law or industry standard practices. Therefore, Patriot National might be well-positioned to grow its top-line results in the foreseeable future without facing too much risk on the downside. Shares of Patriot National are up 6% year-to-date, after having gained 17% in the past month alone. Despite that, the stock is still priced at only 6.2-times expected earnings, versus the forward P/E ratio of 15.4 for the Insurance Brokers sector. Ken Griffin’s Citadel Advisors LLC owns 697,207 shares of Patriot National Inc. (NYSE:PN) as of December 31.

Ardelyx Inc. (NASDAQ:ARDX) had one member of its Board of Directors purchase a large block of shares this week. Director Gordon Ringold purchased a new stake of 15,000 shares on Monday at prices varying from $7.64 to $7.86 per share. The stake is entirely held by the Barthold Family Foundation, for which Mr. Ringold serves as a trustee. The Director also holds an indirect ownership stake of 10,000 shares through his Individual Retirement Account (IRA).

Ardelyx is a clinical-stage biopharmaceutical company that focuses on the discovery and development of minimally-systemic therapeutic drugs for the treatment of gastrointestinal and cardio-renal diseases. The company has developed a proprietary drug discovery and design platform that facilitates the discovery and design of novel drug candidates in a cost-efficient manner. Ardelyx’s lead product candidate, tenapanor, is currently being studied in two pivotal Phase 3 clinical studies in patients suffering with constipation-predominant irritable bowel syndrome, or IBS-C. The company also initiated a separate Phase 2b clinical trial to evaluate the efficacy of tenapanor in the treatment of hyperphosphatemia, or elevated serum phosphorus, in ESRD patients. According to fresh estimates, roughly 4.4 million people in the United States suffer with IBS-C and approximately 1.00 million of those people have been diagnosed with it. Moreover, there are an additional 6.6 million IBS-C patients in Europe and roughly 3.4 million in Japan, so the market potential of tenapanor seems to be quite promising. The aforementioned Phase 3 studies were commenced in the fourth quarter of 2015 and the company anticipates results from those trails in 2017. Shares of Ardelyx are 58% in the red year-to-date, which appears to justify the recent insider buying. Peter Kolchinsky’s RA Capital Management cut its stake in Ardelyx Inc. (NASDAQ:ARDX) by approximately 493,000 shares in the December quarter, ending the year with 571,444 shares.

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