Includes: NGM Biopharmaceuticals, Inc. (NGM), PFMT, SFIX
The greater the ignorance the greater the dogmatism.”― Sir William Osler
The market had a decent week. The major banks and large healthcare companies kicked off third quarter earnings seasons. Overall, results were above expectations. Brexit made some progress but will be delayed as details need to be worked out for the agreement to get through parliament. General Motors (GM) looks on the verge of settling a month long strike by next week as well.
This leaves the S&P 500 and most of the major indices within shouting distance of their all-time highs hit in July. So what are insiders still buying in the current market? Here are three names that caught our eye this week.
Let's start with Stitch Fix (SFIX). This volatile retail play is trading near its original IPO price from where it debuted on the public markets two years ago. Insiders have been frequent and consistent sellers in the shares since lock ups expired.
However, on October 10th a director and beneficial owner of the stock made the first insider purchases in this name ever since it became a public company. He bought just over $3.1 million in shares in two transactions on that day increasing his stake in this San Francisco based online retailer.
The stock has started to pick up some analyst support in recent trading sessions. On October 8th, Stifel Nicolaus maintained its Buy rating and $28 price target on the stock citing the company's 'attractive valuation and "tailwinds to growth" .
Six days later, Robert W. Baird initiated the shares as an Outperform with the same price target as Stifel. Finally on Friday, Telsey also initiated the shares as a new Outperform with a $29 price target. Evidently at least one insider agrees with analysts recent optimism on the shares.
Special Offer: 40% Off First Year Membership And Free Two Week Trial into The Insiders Forum. Just send me a message (Please put 40% off in title) and I will send you a special discount link to try our market beating service for 14 days risk-free with 40% of the first year of membership should you decide to not cancel after your two week free trial period.
Next up is NGM Biopharmaceuticals (NGM). 3 Beneficial owners including one director bought just under $5 million in over a dozen separate transactions from October 9th and 16th. This follows a similar buying spree by these entities in August.
Like Stitch Fix, the company is based in San Francisco and focused on developing novel therapeutics for the treatment of cardio-metabolic, liver, oncologic, and ophthalmic diseases.
The stock took a hit earlier this month when preliminary 24-week data for Phase 2 NASH candidate underwhelmed. The company came public midway through the second quarter. Like most IPOs in the sector over the past several years, shares trade under its IPO price. As can be seen here, the company has multiple 'shots on goal' in its pipeline. All are relatively early stage, but the 'smart money' seems to have faith that the company will eventually be successful in development.
Finally, microcap ($55 million market cap) Performant Financial Corporation (PFMT) sees its first insider purchases in nearly a year and a half a beneficial owner buys nearly $1 million in new stock in a half dozen transactions from October 9th through October 15th.
This small cap concern is based just outside San Francisco. The company provides technology-enabled audit, recovery, outsource customer, and related analytics services. Performant offers recovery services primarily to the government-supported student loan industry. As can seen from the chart above, investor sentiment on the shares have waned considerably over the years.
This is a very unfollowed firm. The last focused article on it here on SeekingAlpha was in 2015. I also can find no current analyst ratings on the stock currently. The company remains unprofitable but is seeing revenue growth in the mid-teens current. The stock also sells for about one third of annual sales. One insider seems to think the equity is undervalued given recent purchases despite a dearth of coverage on the stock.
And those are three equities seeing recent and notable insider buying even as the market hovers near all-time highs.
Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence.”― Robert Anton Wilson
Every Monday morning we put out new research on an undervalued small or midcap stock. If you are registered to receive our weekly free reports, you would have received our latest trade idea in your 'in' box before the bell Monday morning. This week's report revolved around an intriguing mid-cap biotech stock. If you are not signed up yet for this free service, just click HERE to download that latest report. This action will also ensure you receive all future free weekly reports as published as well.
Thank You & Happy Hunting,