Investors closely monitor insider buys, as they can give hints surrounding the long-term picture.
An insider is an officer, director, 10% stockholder, or anyone who possesses internal information because of their relationship with the company. It’s critical to note that insiders have a longer holding period than most, and many strict rules apply to their transactions.
Several large-cap companies – Bristol-Myers Squibb BMY, Pfizer PFE, and Centene CNC – have seen recent insider activity. Let’s take a closer look at the transactions for those interested in trading like the insiders.
Bristol-Myers Finds Momentum
Bristol-Myers Squibb is one of the leading global specialty biopharmaceutical companies focused on the development of treatments targeting serious diseases like cancer, inflammatory, immunologic, cardiovascular or fibrotic diseases.
An insider recently made a purchase of roughly 1.8k BMY shares, with the total transaction totaling just above $100k. Shares have found some much-needed momentum over the last three months, up nearly 20% and boosted by its recent set of quarterly results.
Image Source: Zacks Investment Research
Pfizer Sees Bullish Outloook
Pfizer, a current Zacks Rank #2 (Buy), is a research-based global biopharmaceutical company. Strong demand for Paxlovid following a recent wave of COVID-19 helped drive better-than-expected results in its latest release, with successful cost-cutting measures also providing tailwinds.
A director recently made a small splash, acquiring 1k PFE shares at a total cost of roughly $28k. Analysts have taken a bullish stance on the company’s current year outlook, with the $2.88 per share expected up nicely from the $2.22 per share expected in early March.
Image Source: Zacks Investment Research
Centene CEO Steps Up
Centene is a well-diversified healthcare company that primarily provides a set of services to the government sponsored healthcare programs. The CEO recently made a pretty sizable purchase, scooping up roughly 4.1k CNC shares at a total transaction cost of just above $250k.
It’s been a tough year for the stock, down 21% and widely underperforming relative to the S&P 500. While the stock currently isn’t a screaming buy, perhaps the CEO noticed some value after the plunge.
Shares are considerably cheap on a relative basis, with the current 8.4X forward 12-month earnings multiple well beneath the 11.7X five-year median. And the current PEG ratio works out to 0.8X, reflective of both growth and value. The stock sports a Style Score of ‘A’ for Value.
Image Source: Zacks Investment Research
Bottom Line
Many investors closely monitor insider buys, looking to receive insights into the longer-term picture. The transactions shouldn’t be relied on for near-term performance, as insiders’ holding periods are longer than most and many strict rules apply.
Rather, investors can see insider buys as an overall net positive concerning the longer-term outlook.
All stocks above – Bristol-Myers Squibb BMY, Pfizer PFE, and Centene CNC – have seen recent insider activity.
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Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Centene Corporation (CNC) : Free Stock Analysis Report