During the stock market’s stunning rally off the March 2020 bottom, there have been several corrections or “dips” along the wide. These have ultimately been perceived as buy opportunities and subsequent waves of buying have repeatedly pushed the major indices to new heights in 2021.
While we have grown accustomed to associating the “buy the dip” battle cry with frenzied retail traders, the strategy has also been popular among influential institutions and insiders.
The market’s September swoon has once again attracted investors from all walks of life looking to buy before stocks potentially move on to fresh record highs. These are a few of the most convincing moves made by key corporate insiders.
Are Insiders Buying CIM Commercial Trust?
The more CIM Commercial Trust (NASDAQ: CMCT) has faltered, the more insiders have lined up to buy shares in the office REIT. On the heels of three straight down years, the stock’s descent has accelerated this year and some insiders appear to be thinking enough is enough.
Board members Shaul Kuba, Avraham Shemesh, and Richard Ressler were very active in CIM Commercial Trust stock in September including in the final days of the month. The trio, all of which are 10%-plus owners, each made identical $599,748 purchases from September 30th to October 1st. The average prices on the two days were approximately $8.99 and $8.72, respectively. They were executed on behalf of the CIM Real Assets & Credit Fund in which the directors have an indirect interest in the REIT.
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CIM Commercial Trust hasn’t participated in the broader rally in REIT stocks this year. The SPDR Dow Jones REIT ETF is up 23% year-to-date, while CIM Commercial Trust is down more than 40%. The group’s L.A. and San Francisco-based properties have struggled to attract tenants with many businesses hesitant to commit to shiny new office space during the pandemic. However, the recent buying activity of insiders could mean better times are ahead.
Are Insiders Buying the Drop in Safehold Stock?
After climbing to an all-time high above $95 in August diversified REIT Safehold (NYSE: SAFE) plunged as low as $71.76 last month. Since the stock declined more than 20% from a recent peak it is considered to have entered “bear market” territory. This is a term we typically hear associated with the stock market as a whole but can also be applied to individual stocks.
Safehold’s most prominent institutional insider has been quick to swoop in during the sharp downturn. On September 27th ISTAR bought a whopping $50 million of the REIT at a price of $76 per share. The purchase was part of a private placement that happened concurrently with Safehold’s 2.53 million share public offering. A private placement refers to when a company seeks equity funding through a private offering to a select group of investors such as family, accredited investors, and institutions.
Since adding $50 million to its Safehold stake, ISTAR has remained active in the stock. In fact, it bought an additional $4 million of the REIT over the next four days in four increments of roughly $1 million each. The real estate investor now owns nearly 36 million Safehold shares which represent about two-thirds of the shares outstanding making it an insider to watch.
Who are Kodiak Sciences’ Key Insiders?
After an incredible run that took Kodiak Sciences (NASDAQ: KOD) from a $10 stock to a $171 stock from 2019 to early 2021, the mid-cap biotech play has finally taken a breather. It dipped back below the $100 level this summer and has been slow to return to the triple digits. That may be about to change given the recent support of a major institutional insider.
In the final two days of September, Manhattan-based investment firm Baker Bros. Advisors made an $8.3 million purchase of Kodiak Sciences. When the dust settled, Baker Bros. Advisors held more than 13.5 million shares spread across various life sciences-focused investment funds. Since it now owns more than one-fourth of outstanding Kodiak Sciences shares, retail investors should be aware of the firm’s actions and potential to move the stock.
The historic surge in Kodiak Sciences stock was tied to the company’s success in developing therapies that prevent high prevalence retinal diseases. Its lead product candidate, KSI-301, is being developed as a treatment of certain diseases that are the leading causes of blindness in elderly and adult patients. The clinical program is taking place at 150 sites across more than 10 countries.
Although Kodiak Sciences has other therapeutics candidates in its pipeline, a lot is riding on the advancement of KSI-301. Absent much financial data, it can be hard for retail investors to get a read on how well a biotech company like Kodiak Sciences is performing. That can make the vision of key institutional insiders like Baker Bros. Advisors a critical guide in making investment decisions on the stock.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Creative Media & Community Trust Co. (CMCT) | $0.38 | +6.2% | 41.72% | -0.14 | Hold | $4.00 |
| Safehold (SAFE) | $21.19 | +2.4% | 3.35% | 12.46 | Moderate Buy | $28.44 |
| Kodiak Sciences (KOD) | $3.90 | +1.6% | N/A | -1.04 | Reduce | $5.00 |
