Insiders are Loading Up on These 3 Stocks

Although U.S. stock indices continue to climb to new record highs, not all stocks have participated in the rally. In fact, some have trended lower for a variety of reasons from poor financial results to selling pressure applied by doubtful sellers.

Still, with most stocks trending higher along with the broader market it can be hard to find names that may be undervalued. A great place to dig for clues is to learn what company insiders are doing. This group of in-the-know investors can provide valuable hints as to whether a stock is a good buy.

In recent weeks, there has been steady levels of insider buying most notably in some of the underperformers. Let’s look at a few of the companies that insiders have piling into as their share prices have dipped. 

Will SentinelOne Stock Go Higher?

SentinelOne (NYSE:S) is a California-based cybersecurity firm that made its public market debut on June 30^th. As many technology IPOs go, SentinelOne stock had a solid debut rising 12% within the first five trading sessions.

Then as short-term profit-taking set in and the overall market corrected, SentinelOne slid back below its inaugural open price of $46. That’s when a key corporate insider stepped in.

From July 14^th to July 15^th, well-known hedge fund manager Daniel Loeb of NYC-based Third Point purchased nearly $9 million worth of the upstart cybersecurity play. The size of the purchase paled in comparison to the $81.1 million buy made nine days prior, but more importantly, marked a show of support for a stock that cooled off quickly.

Since Mr. Loeb added to his 2 million share-plus positions last month, SentinelOne has rallied back into the $50’s. An upward trending market, a healthy appetite for cybersecurity stocks, and support from a prominent insider bode well for further upside for this NYSE newbie.

Is it a Good Time to Buy Acutus Medical Stock?

Medical device maker Acutus Medical (NASDAQ: AFIB) has struggled to find its way since its August 2020 IPO. After getting off to a strong start, the stock has sunk well below its initial offering price and is down more than 40% this year.

In recent days, buying activity in Acutus Medical has picked up considerably. Is the bottom in? Company insiders sure seem to think the stock is oversold.

Two weeks ago, three board members, each bought nearly $15 million of Acutus Medical. Directors David Bonita and James Flynn as well as health care focused investment firm OrbiMed Advisors acquired the stock at a price of $14 as part of a secondary share offering. All three own more than 10% of the outstanding shares.

What’s also reassuring is that despite the slide in Acutus Medical stock, there hasn’t been any insider selling along the way. This shows that company executives and board members believe in its growth prospects and see no reason to exit at a loss.

Next week Acutus Medical will be reporting second-quarter results. The Street is anticipating a $1.00 per share net loss on revenue of just $4.2 million.

However, it will be management’s update around the progress of the company’s novel arrhythmia management products that will likely dictate the small-cap stock’s movement. The successful secondary equity raise and ample participation from key stakeholders could point to heathier times ahead for Acutus Medical.

Are Insiders Buying IMARA stock?

IMARA (NASDAQ: IMRA) is a micro biotechnology stock that has been on a wild ride. Its March 2020 IPO coincided with the onset of the pandemic but that didn’t deter investors from bidding up the stock from $14 to as high as $62.71 three months later.

It has been all downhill since. IMARA shares are now flirting with penny stock territory at around $6.00. This type of volatility isn’t unusual for tiny biotech upstarts whose fortunes often depend on the success of a sole product or therapeutic focus.

IMARA is dedicated to developing therapies for sickle cell disease and beta-thalassemia. Its pipeline presently hinges on its first product candidate IMR-687, a small molecule inhibitor.

Last month the company completed a secondary offering to raise $50 million to advance the development of IMR-687. News of the dilution didn’t sit well with existing shareholders and the stock gapped lower in heavy volume.

Things are starting to look up though thanks to some buying by board members during the secondary offering. In total, three directors purchased $28 million of IMARA marking the first insider activity since CEO Rahul Ballal shed $125,000 worth of the stock back in December 2020.

Momentum is building this week with the market taking note of the insider interest. In morning trading on August 3^rd, IMARA jumped 15% in above-average volume as investors started to move into the stock ahead of the company’s second-quarter report on August 6^th. With a nudge from insiders, the buzz is increasing on IMARA as investors hope the stock can someday return to its early glory days.

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