Studying insider trades is one of the most popular ways to devise an investment strategy. Valuable clues can be gleaned from the buying and selling activity of corporate executives and influential institutions.
Insider trades can be analyzed from several angles. Some investors like to focus on the actions of notable insiders such as CEOs or well-known hedge funds. Others are most interested in the biggest of insider trades in terms of dollar value.
Yet another metric that is used to screen for significant insider activity is net insider buying. Often shown as a share amount, it subtracts any insider selling from the cumulative insider buying during a given period.
Since the largest net buying in terms of shares tend to involve low-priced companies, this can be a great way to identify attractive small- and mid-cap names that insiders are buying. Below are three recent examples.
Are Skillz Insiders Buying or Selling?
In the past week, four large trades have been reported by four different Skillz (NYSE: SKLZ) insiders. In aggregate, the three buys and one sell, represent more than $6 million worth of net insider buying.
The biggest splash was made by CEO Andrew Paradise who purchased nearly $5 million of Skillz stock on November 8th at a price range of $11.325 to $11.71. Mr. Paradise is also the founder of Skillz, an esports company focused on the mobile gaming market. He previously did not hold a position in the stock either directly or indirectly.
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This seems to spark a game of follow the leader. Board member Casey Chafkin bought 86,500 shares at a slightly higher average price bringing his stake to more than 12.6 million shares. The same day, CTO Miriam Aguirre exercised and sold options which amounted to an $898,232 sale. This was offset by a $997,600 buy the next day by director Harry Sloan.
This was a good example of a sudden spree of insider trading that resulted in net insider buying of approximately a half million shares. The activity came on the heels of Skillz third-quarter earnings report that highlighted the success of its ‘Big Buck Hunter: Marksman’ game. Shot gunned by its CEO’s big statement buy, Skillz has trended higher since slipping to a 52-week low a month ago.
Did Archer Aviation Insiders Buy the Dip?
There has been a wave of insider buying activity since Archer Aviation (NYSE: ACHR) joined forces with special purpose acquisition company (SPAC) Atlas Crest Investment Corporation and began trading on the New York Stock Exchange. You wouldn’t know it by the share price however, which has plummeted more than 40% since its debut.
Archer Aviation, a specialist in electric vertical takeoff and landing (eVTOL) technology, has one insider that has been buying on the dip. Marc Lore, the CEO of Walmart eCommerce, added 444,272 shares to his stake across three days in late October. During the first three days of November, he bought another 482,342 shares as the stock gapped higher in heavy volume.
Mr. Lore, who is also the founder & CEO of Jet and co-owner of the NBA’s Minnesota Timberwolves, is the largest Archer Aviation shareholder. He owns nearly 27 million of the roughly 157 million outstanding shares for a 17% equity ownership.
Archer Aviation is yet to book any revenue and posted a $177 million net loss last quarter. The company’s long-term vision is becoming an environmentally friendly alternative to pollutive automobile traffic through its Urban Air Mobility service. It remains to be seen if the idea takes off, but Archer’s main backer is certainly along for the ride.
Who are Alpine Immune Sciences’ Biggest Insiders?
Alpine Immune Sciences (NASDAQ: ALPN) is a small-cap biotechnology company focused on developing immunotherapies to treat cancer and various autoimmune disorders. Its lead drug candidate for the treatment of lupus is in a phase 2 trial in partnership with AbbVie. It has two other candidates that are undergoing phase 1 studies.
There has been a mix of insider buying and selling over the last couple months that has equaled $37 million in net insider buying. While Executive Chairman and CEO Mitchell Gold has been a seller, several directors and institutional directors have been big buyers.
Board member Xiangmin Cui bought over 1.5 million shares on September 17th as part of a $91 million private placement. The purchases were made for the Decheng Capital China Life Sciences Fund which currently owns more 4.7 million of the 29.2 million outstanding shares. The same day, Manhattan investment group Orbimed Advisors added more than 1 million shares to its position at the $9.40 offering price.
Last week Alpine Immune Sciences provided a third-quarter update that discussed the benefits of the private placement in accelerating its developments plans. Like many early-stage biotechs that lack a commercialized product, the financial results were underwhelming but the clinical developments were mostly positive. The volatile stock has surged 38% to $13.00 since the private placement.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Alpine Immune Sciences (ALPN) | $64.97 | flat | N/A | -101.52 | Hold | $56.63 |
| Archer Aviation (ACHR) | $7.50 | +24.1% | N/A | -5.68 | Moderate Buy | $9.33 |
| Skillz (SKLZ) | $5.65 | +3.3% | N/A | -2.51 | Moderate Buy | $10.75 |
