Key points
- Insider buying can be a significant indicator of future stock prices, and no insider is better than the CEO.
- However, CEO purchases are not enough to support price action; it takes institutional and analyst involvement to keep a stock running.
- This is a look at CEOs’ top five purchases from the first quarter and whether their stock prices can continue to rise in the second quarter.
- 5 titles we like most from Sphere Entertainment
Insider buying is good. It shows management’s confidence in a company, helping to support investor sentiment, and no insider is more significant than the CEO. Who else is as up-to-date on a company’s health and prospects as the person in charge? This is a list of the five most significant CEO purchases in the first quarter of 2024 based on dollar volume.
#5 Allegion CEO John Stone bought stock in the first quarter
Allegation NYSE: ALL is a Dublin based security company specializing in doors. Manufactures and supplies mechanical and electronic devices for door security, including software and operating systems for IoT devices. Today the company applies artificial intelligence and generates profits. John Stone, the company’s CEO, bought more than $1.3 million worth of shares in the first quarter, putting him and Allegion in fifth place.
The company is expected to produce solid results this year, but the stock price may need help rising. Analyst sentiment has weakened due to the recent rally in stock prices and valuations. They rate the stock a Hold and see it falling 5% from consensus. The consensus is up from last year, but has flattened following the latest earnings report, which is a drag on price action. Other insiders, including several senior vice presidents, have been selling, which could add to headwinds.
#4 Marpai, Inc CEO Triples Holdings in First Quarter
Marpai, Inc NASDAQ: MRAI The CEO made two purchases in the first quarter that effectively tripled his position. The purchase of a director has aggravated his purchases, bringing the total internal shareholding to 61%. The purchases are noteworthy because other first-quarter news includes better-than-expected results and prospects for hypergrowth in the coming years. The company’s AI-powered business services aim to disrupt the billion-dollar self-insured employer market and are gaining traction. A well-received investor conference led to a move to Buy from Hold by Maxim Group. Maxim has set a price target of $6 or higher at 150% of the current price movement.
#3 Keurig Dr Pepper CEO invests $5 million in KDP stock
In March, Keurig Dr. Pepper’s NASDAQ: KDP The CEO purchased nearly $5 million worth of KDP stock. Added to CFO purchases, internal purchases exceeded $750 million in the quarter, but were offset by institutional sales. Major shareholder JAB Holding has reduced its position but still holds more than 20% of the shares. The CEO purchase brings his total to about 0.22% and preferred holdings to 0.8%. Institutions other than JAB Holdings have been purchasing on balance sheet for more than five quarters and their business is stable. Ten analysts rate this consumer staples stock as a Moderate Buy and see it as a deep value, trading below the low end of the target range, up more than 15% from consensus.
#2 Snowflake’s new CEO buys another $5 million in stock
Snowflake NYSE: SNOW made big news when it announced a surprise CEO transition. The new CEO is Sridhar Ramaswamy, an existing executive, and he celebrated the appointment by buying more shares. His purchase topped $5 million, bringing his holdings to more than 224,000 shares. It holds about 0.06% of the company, with insiders and major shareholders together owning about 8%. Institutional activity is also bullish in the first quarter, surging and peaking compared to the fourth quarter, with net purchases doubling sales. Institutions own about 65% of the stock; analysts rate it a Moderate Buy with about 30% upside according to consensus.
Title no. 1 from Sphere Entertainment is the #1 title. 1 purchased by a CEO in the first quarter
Entertainment sphere NYSE:SPHR, formerly Madison Square Garden, is No. 1 on the CEO’s shopping list. CEO James Lawrence Dolan made three purchases for $11 million. These are significant because they include the largest insider purchase and two additional trades at par with that amount. His holdings represent nearly 1.5% of the company, bringing total ownership by insiders and major shareholders to 25%. Institutions also buy and own a total of 92%. Analysts rate the stock a Hold, but see it trading significantly above the high end of their target range.
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