Corporate insiders, including top executives and board members, possess valuable insights into their companies’ inner workings. As a result, their buying and selling activities can provide investors with a unique perspective on a stock’s potential. To level the playing field, regulatory bodies require insiders to disclose their transactions, allowing investors to tap into this valuable information.
A closer examination of recent insider trades reveals two companies that have caught the attention of board members, who have invested millions of dollars in their own companies’ shares. This significant outlay suggests increased confidence in the companies’ prospects, and a closer look at these stocks reveals strong buy ratings from analysts and substantial upside potential.
The first company, Terns Pharmaceuticals, is a biopharmaceutical research firm focused on oncology and metabolic diseases. The company’s pipeline features novel small molecule compounds, including two Phase 1 clinical trials. Board member Lu Hongbo recently purchased 476,190 shares, investing nearly $5 million in the company. This significant buy suggests confidence in Terns’ prospects, which are backed by analysts’ strong buy ratings and a potential one-year gain of 159%.
The second company, Permian Resources, is an independent oil and gas exploration and production firm operating in the Permian Basin of Texas. The company recently announced a bolt-on acquisition and a significant increase to its regular base dividend. Company director William Quinn made two large purchases, totaling 312,429 shares, and investing over $3.99 million in the company. Analysts also view Permian favorably, with a strong buy rating and a potential one-year gain of 55%.
In both cases, the significant insider buys, combined with analysts’ strong buy ratings, suggest that these stocks may be worth further investigation for investors seeking opportunities with substantial upside potential.
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