There is a dedicated cadre of market watchers who pay close attention to stock trading by corporate insiders. And with good reason: No one knows more about the inner workings of a company than the people who run it.
Insiders have responded to the market’s August downturn by stepping up purchases, especially in tech stocks, say analysts at Vickers Stock Research Corp., a division of Argus Research Group that tracks insider activity. Whether that will prove prophetic, of course, remains to be seen.
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Here are seven companies, with a market value of at least $1 billion, where insiders have been buying this year, with a taste of analysts’ perspectives on how those companies are doing:
| Stock | Investment | YTD performance through Aug. 22 |
| Lucid Group Inc. (ticker: LCID) | $1.8 billion on June 22 | -11.1% |
| Occidental Petroleum Corp. (OXY) | $1.8 billion between March 3 and June 28 | -0.1% |
| Symbotic Inc. (SYM) | $17.8 million on July 23 | 215.2% |
| CNA Financial Corp. (CNA) | $178 million between May 1 and Aug. 2 | -8.2% |
| Asana Inc. (ASAN) | $60.5 million between June 8 and Aug. 18 | 57.4% |
| Summit Therapeutics Inc. (SMMT) | $420.2 million between March 6 and March 8 | -57.2% |
| Paramount Global (PARA) | $2.5 million on May 16 | -13.9% |
Lucid Group Inc. (LCID)
Only one insider has been a major buyer at the electric vehicle company this year. But when that buyer is Saudi Arabia’s sovereign wealth fund — which already owned more than 60% of Lucid — and the check is for $1.8 billion to buy 265.7 million shares, people take notice.
The June investment helped buoy the company in a year that, back in January, many thought would feature a shakeout of EV makers if a recession took hold and public markets soured on higher-risk companies like Lucid. Companies that survive 2023 and introduce cheaper EVs than the luxury sedans Lucid makes now are likely to thrive over time, Wedbush Securities analyst Dan Ives said.
Months later, the investment is doing what it set out to do. Lucid shares have dropped 39% in the last six months, but the big purchase of shares in June by the Saudis buttressed its balance sheet. With $6.2 billion in cash as of June 30, it has running room to introduce new models like its Gravity SUV, starting at $120,000, and produce its existing luxury cars in more volume. Plus, the company has sketched a vision, with few details, of offering vehicles priced to compete with Tesla’s Model 3 and Model Y for the mass market. The company said on its second-quarter earnings call that it has enough cash to last until 2025, even though it’s still losing money.
Occidental Petroleum Corp. (OXY)
Occidental Petroleum is another example of a company that can get at least a publicity bump when a prominent insider buys more stock. In Occidental’s case, the insider is Warren Buffett’s Berkshire Hathaway Inc. (BRK.A, BRK.B), whose position in OXY stands at about 25% of the company. Buffett bought about $1.8 billion of OXY between March 3 and June 28. But the market remains cool on the Los Angeles-based oil company, with only seven of the 12 analysts who follow it calling it a buy, according to TipRanks.
The issue is the trouble Occidental is still having digesting the 2019 acquisition of Anadarko Petroleum, CFRA Research analyst Stewart Glickman said in a research note.
“OXY’s hostile 2019 takeover of the former Anadarko remains a gamble that looks better today than it did a year ago, due to the recovery in energy prices, which has enabled OXY to largely restore its balance sheet,” said Glickman, who recommends the shares.
Symbotic Inc. (SYM)
Symbotic is near the top of the insider-buying charts because of a major new deal with SoftBank Group Corp. (OTC: SFTBY), which has had a representative on the board of the warehouse automation company since last year. SoftBank bought about 17.8 million of Symbotic shares in July as part of that deal.
Shares have more than tripled since Jan. 1 as Symbotic became one of the major beneficiaries of the market’s 2023 fascination with artificial intelligence. Symbotic and SoftBank expanded their partnership by forming a joint venture to sell a “warehouse as a service” product together, with the joint venture committing to buy $7.5 billion of Symbotic’s AI robotics and software-powered services over six years. A week later, the stock had a 50% one-day rally after the company reported quarterly earnings on July 31.
While Symbotic isn’t yet profitable, it nearly doubled its year-over-year sales in the quarter that ended June 24 and has clients such as Walmart Inc. (WMT) and Target Corp. (TGT).
CNA Financial Corp. (CNA)
Loews Corp. (L) has stepped up this year to bolster its belief in CNA, which like Loews is part of the old Tisch family financial empire. Loews bought another 4.5 million shares on Aug. 2, which increased its stake to about 92% of the insurance business. So far, in 2023, Loews has spent $178 million purchasing CNA shares.
The new bet hasn’t yet moved CNA’s stock, which is down 8.2% this year through market close on Aug. 22, but it comes at a time when the company’s profits are rising. CNA reported a 49% year-over-year jump in second-quarter net profit, driven by both higher investment returns and better profitability in its core property-casualty insurance business.
Asana Inc. (ASAN)
CEO Dustin Moskovitz announced in March that he would purchase as many as 30 million shares in the company. Moskovitz followed through on his promise and has been steadily purchasing shares to reach about 41.9 million total shares as of Aug. 18. Overall, Moskovitz has plowed $60.5 million into the company in 2023. Shares of the San Francisco software company are up by 57% this year through Aug. 22.
The confidence booster pushes back against Wall Street, where TipRanks says only three of 10 analysts covering the stock recommend buying it.
Street forecasts project that the company won’t turn profitable for another two years, with marketing and research and development spending both high. But first-quarter fiscal 2024 sales grew 26% to $152.4 million, while the operating cash flow loss of $14.6 million was much smaller than the $41.1 million loss reported a year before, a sign the company is trending toward the green.
Summit Therapeutics Inc. (SMMT)
Shares of the California-based biotech company have had a rough year, having dropped about 57% through Aug. 22. But they stand as 2023’s clearest test of whether insider buying really is the trading signal some analysts believe it is.
On one hand, Summit’s billionaire CEO Robert Duggan put up about $395 million in early March, with him and two other insiders adding about 400 million shares in the biggest insider buy this year, Vickers said. They followed other big purchases Duggan and Co-CEO Maky Zanganeh made last year, but because the biggest investment came in a below-market private sale in March, some questioned whether the deal would send the positive signal to public investors that insider buying often does. Nonetheless, the few Summit shares that trade publicly have climbed to $1.82 since from $1.38 before the March deal was announced.
Summit, which reported no revenue in the first half and a net loss of more than $557 million, said it had licensed rights to an in-development lung cancer drug that the company says is ready for late-phase clinical trials. It is de-emphasizing its previous plan to develop antibacterial drugs.
Paramount Global (PARA)
Paramount, the owner of the movie studio and the CBS TV network, is a warning sign that insider buying isn’t always a reliable signal by itself. Director Shari Redstone, whose father built up the company over decades of dealmaking, has made an open-market purchase of Class B common stock in May, worth about $2.5 million.
But the company has struggled as CBS loses ground to streaming networks, and Paramount’s own streaming service continues to lose money. Shares are down about 14% this year, most of it due to a dividend cut and earnings miss announced weeks before Redstone’s latest buy. Only six of the 17 analysts who follow Paramount recommend the stock, and seven call it a sell, according to TipRanks.
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7 Stocks With Large Insider Trading Buys originally appeared on usnews.com
