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Gigantic Biotech Trade Highlights The Week’s Insider Buying

Another week of volatility, helped along perhaps by the failure of the Federal Reserve to nudge interest rates up on Thursday, did not slow down the tsunami of insider buying. Ever since the massive sell-off in August, insider buying has swamped the selling, and this past week was no different.

We cover insider buying every week at 24/7 Wall St., and we like to remind our readers that while insider buying is usually a very positive sign, it is not in of itself a reason to run out and buy a stock. Sometimes insiders and 10% owners have stock purchase plans set up at intervals to add to their holdings. That aside, it still remains a positive indicator.

Here are some of the companies that reported notable insider buying last week.

Seattle Genetics Inc. (NASDAQ: SGEN) had a large holder add to already significant holdings. Julian and Felix Baker’s hedge fund Baker Brothers Holdings continue to relentlessly buy stock in the company. This past week they picked up an additional 1.8 million shares at prices that ranged from $41.43 to $48.28. This brings the fund’s holdings to a massive 36 million shares, 26% of the outstanding shares of the issuer. Baker Brothers has been adding to its stake over the past seven quarters, with the holding nearly doubling in size during that time. Seattle Genetics develops and commercializes antibody-based therapies for the treatment of cancer. The company is developing antibody-drug conjugates (ADCs), a technology designed to harness the targeting ability of antibodies to deliver cell-killing agents directly to cancer cells. Shares were trading on Friday at $48.68.

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Sprint Corp. (NYSE: S) continues to see huge buying from Softbank Group, who is already a major shareholder in the struggling carrier. This past week the company bought an additional 7.45 million shares of the stock at prices between $4.59 and $4.99 apiece. The total for this buy came to a whopping $35.6 million. Sprint shares were trading on Friday at $4.56.

Hess Corp. (NYSE: HES) is a top energy stock that saw some significant buying last week. CEO John Hess bought a total of 143,900 shares at a price of $52.27 per share. The total cost for the trade was $7.5 million. Hess is an exploration and production company that develops, produces, purchases, transports and sells crude oil, natural gas liquids and natural gas. The shares were trading on Friday at $54.60, so a very well-timed purchase.

American Eagle Outfitters Inc. (NYSE: AEO) was a top story on Friday as the executive chairman and interim CEO Jay Schottenstein continues to add to his holdings in a very big way. Schottenstein bought a huge 500,000 share block of the trendy retailer at prices that ranged from $15.67 to $15.84. The total tab for the big trade came to $7.9 million. The shares were trading on Friday at $16.26, so well-timed so far.

Sears Holdings Corp. (NASDAQ: SHLD) is a frequent guest on this report, and last week was no different. Edward Lampert continues buying back the shares of the company where he is the chairman and CEO. He just acquired a total of 213,124 shares of the iconic retailer at prices from $25.02 to $25.25. The total for the buy came to $5.4 million. The stock was trading on Friday at $25.72.

Francesca’s Holdings Corp. (NASDAQ: FRAN) is yet another retail chain that saw insider buying this past week. The CEO and a director bought a combined 47,000 shares of the stock at prices that ranged from $11.66 to $11.88. The total for the buy came to $553,000. The company offers fashion apparel, jewelry, accessories and gifts, primarily for women between the ages of 18 and 35. The stock was trading Friday at $12.22, so the buy looks well timed.

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These companies also reported insider buying this week: Barnes & Noble Inc. (NYSE: BKS), Dollar General Corp. (NYSE: DG), Dominion Midstream Partners L.P. (NYSE: DM), Global Partners L.P. (NYSE: GLP) and Intersil Corp. (NASDAQ: ISIL).

The huge biotech trade aside, we are seeing more and more energy company insiders showing up as buyers. This is very positive for a sector that has struggled mightily in the last year. As mentioned, insider buying also continues to swamp selling, another very bullish indicator.

By Lee Jackson


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