Over the past couple of days, the healthcare sector has witnessed plenty of insider activity, which should not be overlooked. In this article, I will examine two small-cap companies amongst the aforementioned ones, the insider purchases, and their institutional sponsorship.
First off is AngioDynamics, Inc. (NASDAQ:ANGO), a $491 million market cap provider of medical devices used in minimally invasive, image-guided procedures to treat peripheral vascular disease, and local oncology therapy options for treating cancer. On April 14th, Matthew Kapusta, Senior Vice President at the Business Development segment of the company, acquired 1,000 shares of Common Stock, despite its valuation at 126 times the company´s earnings. He paid $13.90 per share and now holds 27,005* shares of the company, worth about half a million dollars.
On top of Mr. Kapusta’s bullishness, at least 19 major hedge funds hold long positions in the stock. The largest institutional sponsor, Robert G. Moses‘ Rgm Capital, recently upped his stakes slightly, to 3.44 million shares, worth more than $47 million. Israel Englander also seems to feel confident about the company’s future, as he last increased his stakes by 936% to 188,135 shares; and similar is Jim Simons’ case, who doubled his bets to 186,046 shares.
The second healthcare company I would like to refer to is Adamas Pharmaceuticals Inc (NASDAQ:ADMS), a $220 million market cap specialty pharmaceutical company focused on treating chronic disorders of the central nervous system that went public on April 10th, 2014. Credit Suisse and Piper Jaffray acted as joint book-running managers, and William Blair and Needham & Company served as co-managers.
Although Adamas is much smaller than AngioDynamics in terms of market cap, it certainly looks like a more attractive option. Trading at only 4.2 times the company´s earnings and boasting industry leading margins and returns, this is certainly a stock to consider, and insiders seem to recognize this. On the day that the IPO was closing -April 15th– William Ericson, Board Director and owner of more than 10% of the company’s stock, bought 300,000 shares for $16 per share. Mr. Ericson owns, through diverse indirect holdings, more than 4 million shares of the firm.
* “Includes 911 shares acquired under the AngioDynamics, Inc. Employee Stock Purchase Plan on February 28, 2013, 971 shares acquired under the AngioDynamics, Inc. Employee Stock Purchase Plan on August 30, 2013 and 965 shares acquired under the AngioDynamics, Inc. Employee Stock Purchase Plan on February 28, 2014 (Sec.gov).”
Disclosure: Javier Hasse holds no position in any stocks mentioned