CRCT - 5 Stocks Insiders Are Buying Right Now
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Insider buyer and selling is a controversial topic that many investors love to track. An insider is described as any director or senior officer of a publicly traded company. Persons or entities with 10% or more ownership of a publicly traded company are also considered insiders. Additionally, insiders are thought to have the most knowledge of the company, and logically so.
According to a study from the MIT Press, University of Michigan professor H. Nejat Seyhun tracked stocks that insiders bought over a 19-year period. Seyhun discovered that stocks outperformed the market by 4.5% following an insider purchase. Stocks following an insider sale underperformed the market by 2.7%. The conclusion from this study clearly supports the importance of tracking insider activity.
Furthermore, another study found that insider purchases beat the market by 11.2% annually. Researchers also concluded that company size and insider rank are not significant variables to watch.
So what does this mean for retail investors, and why does it matter? Importantly, insider buying may be more beneficial to track than insider selling. This is because figuring out why an insider sold is a lost cause. There are hundreds of personal reasons why an insider could have sold shares that retail investors may never know. As famed investor Peter Lynch once said, “Insiders might sell their shares for any number of reasons, but they buy them for only one: They think the price will rise.”
With that in mind, let’s take a look at five stocks that insiders are buying recently.
Stocks Insiders Are Buying: Ford (F)
Shares of Ford stock have enjoyed a generous past year, fueled by electric vehicle (EV) speculation. The automaker’s share price has increased by over 170% during that time period. Recently, Ford announced that it would be nearly doubling its planned production to 150,000 vehicles for the upcoming electric F-150 Lightning pickup truck. Retail investors are taking notice, but a certain Ford director has gotten into the action as well.
According to a recent filing, director Alexandra English Ford picked up 38,789 shares of F stock on Dec. 20. English Ford is also the great, great granddaughter of Henry Ford himself. She acquired shares at an average price of $19.33, making the total transaction worth about $750,000. Furthermore, English Ford acquired these shares through a voting trust of which she is the beneficiary.
Since English Ford’s purchase, shares of F stock have increased by an impressive 26% in less than one month’s time. It certainly seems like English Ford made a timely purchase, but it also suggests that an insider that is involved with company operations is bullish on potential developments. This is great news for shareholders of F stock.
Cricut (CRCT)
Cricut operates in a niche market, more specifically the “cutting machine” market for do-it-yourself (DIY) enthusiasts. However, Cricut’s products are more than what meets the eye. Its machines are strong enough to cut through wood and leather and also offer the ability to print stickers and labels. During the third quarter, total users grew to over 5.7 million, which represents year-over-year (YOY) growth of 55%.
Cricut also runs a subscription service that gives users access to features like free shipping, use of over 200,000 images and 700 fonts, and discounts on licensed content. The service is very popular, as paid subscribers increased by 55% YOY to over 1.8 million. Importantly, Cricut is profitable. The company reported its 11th consecutive quarter of profitability during Q3. These impressive numbers have attracted an acclaimed hedge fund to purchase shares incessantly.
During the month of December, Abdiel Capital added shares of CRCT stock 13 times. No, that isn’t a typo. Furthermore, Abdiel has already added shares of Cricut two times this January. The most recent transaction occurred on Jan. 4 when Abdiel picked up an additional 11,300 shares at an average price of $22.99. The hedge fund boasts assets under management (AUM) of $5.8 billion as of Q3. Abdiel also operates as a concentrated fund, holding only 13 positions according to the most-recent 13F filing.
As of today, Abdiel owns 11,070,266 shares of CRCT stock, which represents 33% of the float. It’s safe to say that Abdiel is bullish on the DIY company.
Stocks Insiders Are Buying: Chewy (CHWY)
After a breakthrough 2020 that saw shares of Chewy rise over 200% as a Covid-19 beneficiary, the next year presented a completely different scenario. The e-commerce pet supplies seller saw its shares decline by 34% during 2021 due to supply chain issues, labor shortages, inflation and a reduction in revenue growth. Furthermore, Chewy ended Q3 with 20.4 million active customers, missing consensus estimates for the second straight quarter. Investors are also concerned that sales may drop further if the pandemic completely subsides, which would make consumers more inclined to return to brick-and-mortar pet stores. However, as Warren Buffett once said, investors should be “fearful when others are greedy, and greedy when others are fearful.” Baillie Gifford is doing just that.
Baillie Gifford recently doubled down on its existing Chewy position. On Jan. 4, the fund added roughly 6.7 million shares to its position, which sums up to 13,302,667 total shares owned. After the purchase, Baillie Gifford now owns 12.46% of the float. The United Kingdom-based fund manages a staggering $191 billion in AUM and has an accredited track record.
Asana (ASAN)
Next on the list of stocks insiders are buying is Asana.
Asana operates as a work management platform that helps businesses complete daily tasks. The company’s platform also focuses on workflow solutions that include project, goal and task management. At its peak in 2021, ASAN stock climbed to an all-time high of $145. Today, shares are trading at a massive discount relative to 2021’s highs, down more than 55% to $62.
However, this fall from the highs hasn’t deterred the CEO and founder of Asana from buying shares.
Dustin Moskovitz has been on a relentless buying spree for quite some time now. Moskovitz’s most recent purchase occurred on Jan. 6 when he bought an additional 500,000 shares of ASAN stock at an average price of $61.52. Moskovitz now owns a total of 11,339,676 shares, which represents almost 15% of Asana’s float. Furthermore, in 2021, Moskovitz purchased a total of 8,469,676 shares of ASAN stock that had a combined value of $594,996,496. However, it should be noted that Moskovitz’s purchases are pursuant to a 10b5-1 pre-arranged trading from. Nonetheless, Moskovitz’s purchases demonstrate that he is bullish on ASAN stock.
Today, many insiders buy or sell stock through a 10b5-1 form. This form allows insiders to make prearranged trades for a pre-defined period in order to avoid accusations of insider trading. Additionally, the plan allows insiders to schedule trades during blackout periods, such as quarterly earnings and corporate events, as long as they file a 10b5-1 form well in advance.
Last month, the U.S. Securities and Exchange Commission announced proposed changes to the 10b5-1 form that would “greatly increase disclosure requirements for such trades and require the person setting up the trades to ‘certify that they are not aware of material nonpublic information.’”
Stocks Insiders Are Buying: Oragenics (OGEN)
Last on the list of stocks insiders are buying this week is OGEN.
Oragenics works to develop novel antibiotics and other drugs to assist in the treatment of infectious diseases. However, the biopharmaceutical company has had a rough time since becoming a public entity in 2003. Since then, Oragenics has lost over 99% of its value.
Oragenics is currently focused on developing TerraCoV2, which is an immunization product designed to combat Covid-19. The company is also working to develop lantibiotics, a new class of antibiotics that is known to be effective against many life-threatening infectious agents. Furthermore, Oragenics recently extended its collaboration with the National Research Council of Canada (NRC). The collaboration’s goal is to develop an intranasal vaccine that can help protect against the omicron variant.
Now, a company director is capitalizing on Oragenics’ price decline and ongoing developments.
In a Form 4 filing received on Dec. 31, Oragenics Director Robert Koski made two purchases on Dec. 30 and Dec. 31.
On Dec. 30, Koski purchased 200,900 shares of OGEN stock at an average price of 44.98 cents. On Dec. 31, Koski purchased an additional 799,100 shares at an average price of 47.4 cents. Koski now owns a total of 1,829,569 shares held indirectly through the Koski Family Limited Partnership and trusts of which Koski is the sole trustee. Koski owns an additional 212,839 shares that are held directly by him.
Combined, Koski’s share ownership represents 1.78% of Oragenics’ float. Shares of OGEN stock are currently trading at 52 cents, an impressive 13% higher than Koski’s Dec. 30 purchase price.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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