Top Weekly Insider Buys Include International Flavors & Fragrances Inc (IFF), ProAssurance Corporation (PRA)

Overall insider buying was relatively muted last week as trade war fears continue to weigh on the market and the global economy. Broad insider buying activity provides valuable indications as to the level of optimism in the market among some of its savviest and most well-informed investors.

However, more important still is which specific companies’ shares were being bought. Last week, those companies included Terreno Realty Corporation (NYSE:TRNO), ProAssurance Corporation (NYSE:PRA), and International Flavors & Fragrances Inc (NYSE:IFF). We’ll take a look at those transactions below.

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Terreno Realty Corporation (NYSE:TRNO)

Who Bought Shares: Director Gabriela Parcella

How Many Shares Were Bought: 5,500 @ $37.97 per share

Date of the Transaction(s): June 12

The director’s purchase of 5,500 Terreno Realty Corporation (NYSE:TRNO) shares on June 12 lifted her ownership to 7,914 shares and marked the first purchase by one of the company’s insiders in over three years. Shares of Terreno Realty were down slightly in the first-quarter but have rebounded with gains of 10% in the second-quarter.

The industrial property owner boasts a portfolio of over 200 properties, including recent purchases in Renton, Washington and Newark, New Jersey for $6 million and $6.3 million respectively. Those 200+ properties were 97% leased as of the end of March. Terreno has benefited from strong rent growth on both new and renewed leases, with that figure rising by 12.5% in the first-quarter.

On the next page we’ll look at the insider buying activity at two other companies last week.

ProAssurance Corporation (NYSE:PRA)

Who Bought Shares: Director Magnus Gorrie

How Many Shares Were Bought: 2,000 @ $39.20 per share

Date of the Transaction(s): June 13

The ProAssurance Corporation (NYSE:PRA) director’s purchase of 2,000 shares raised his position in the company to 14,231 shares. It’s not surprising to see insiders start to purchase shares of ProAssurance, which have tumbled by 33% in 2018.

ProAssurance’s first-quarter revenue came in at just $201.03 million, more than 10% worse than estimates, as the retention rate in its physician business continues to decline. At the same time, expenses have been growing, leading to shrinking margins and weaker earnings (which also missed estimates by 10% in Q1). Analysts see ProAssurance Corporation (NYSE:PRA) as one of the riskier plays in the industry at this point due to the unpredictability of its cyclical industry coupled with the soft pricing environment.

International Flavors & Fragrances Inc (NYSE:IFF)

Who Bought Shares: Director Dale Morrison

How Many Shares Were Bought: 4,010 @ $124.60 per share

Date of the Transaction(s): June 12

The director opened a new position in International Flavors & Fragrances Inc (NYSE:IFF), purchasing 4,010 shares for just under $500,000 total. Those shares would’ve cost about $610,000 at the start of the year, as they’ve fallen in value by 18% in 2018.

The latest blow to International Flavors & Fragrances Inc (NYSE:IFF) shares came in early-May after the company announced its $7.1 billion purchase of Frutarom. While management is bullish on the merger, anticipating accelerating free cash flow generation and profitability long-term, the market bristled at the price tag, which amounts to 20.3x Frutarom’s estimated 2018 EBITDA. Argus analyst John Staszak also worries that the company will continue to overpay for growth in order to meet its aggressive 2020 revenue growth projections.

Disclosure: None