Insiders are buying PBF Energy (NYSE: PBF), BioCryst Pharmaceuticals (NASDAQ: BCRX), and Leggett & Platt Inc. (NYSE: LEG), setting them up to rebound. The only questions are what could catalyze their rebounds, when they will begin, and how high they might go. Based on the data, the answers are soon and high for two of these names; the third is set up to fall regardless of how much stock the insiders buy.
Carlos Slim Buys PBF Energy; So Do Analysts and Institutions
PBF Energy is a US-based oil refiner with operations near the Gulf of Mexico. Mexican billionaire and entrepreneur Carlos Slim, who has been building a big stake in Gulf of Mexico-focused energy plays, is buying the stock. His investment firm, Empressarial de Capital, made numerous purchases in early Q1 and late Q2, bringing his total to about 15% of the share count and 17.5% of the float. The buys are alongside a position in another small US operator, Talos Energy (NYSE: TALO), which gives Mr. Slim a diversified position in the US Gulf of Mexico energy industry.
And Mr. Slim is not the only investor buying this stock. The true insiders have only sold this year, but their activity aligns with share-based compensation, so it is not a red flag. Conversely, institutions are betting big on this stock, having bought on balance the last two quarters, raising their total interest to over 96%. Notable details from the institutional activity include large position increases from various institutions, including smaller private investment firms.
Analysts rate the stock at Hold and see it rising about 30% at the midpoint. The analysts have lowered their price targets recently, but the reductions are small and align with the consensus target, so there is a high degree of conviction. The stock also trades below the low end of the range, suggesting a deep value opportunity.
BioCryst Pharmaceuticals Buy Shares After Earnings Update
BioCryst Pharmaceuticals insiders, including four directors, the CFO, and Chief Research and Development Officer Dr. Helen M. Thackray, bought shares of BCRX stock conspicuously following the latest earnings report. The report included better-than-expected top and bottom line results and a positive guidance update due to the strength of its key product sales. Sales were guided to the high end of the previous range, which may still be a cautious estimate.
The results and guidance were compounded by a positive pipeline update suggesting two additional products could come to market over the next year to 24 months. Insiders own nearly 5% of this stock.
Institutional activity is also supportive of this market. The institutions have bought on balance for six consecutive quarters, and their activity aligns with a bottom for the market. Analysts also support the market bottom. Over the last six months, they’ve lifted their consensus sentiment to Buy from Moderate Buy and adjusted their price targets. The takeaway is that the consensus price target has held steady despite the revisions and implies a 115% upside.
Leggett & Platt Inc. Insiders Are Buying All of a Sudden
Leggett & Platt Inc. is an industrial products company trading at a deep discount of 9x earnings and a 15-year low. The low price attracted insiders to buy, which is noteworthy because there was no insider activity in the previous three quarters and only selling before that. The caveat is that purchases came soon after the company announced a significant dividend cut and are insufficient to support the market. Leggett & Platt has struggled for the last two years and needs right-sizing. The distribution cut is intended to free up capital for balance sheet improvement, including debt reduction, investing in growth, and margin improvements.
The institutional activity is mixed but bearish on balance. The net of activity in 2024 is tilted in favor of lower prices, which is a force insiders and retail investors can not stop. Analysts also provide a headwind for the market. The three tracked by InsiderTrades.com peg the stock at Reduce and have lowered the consensus by more than 50% in the last twelve months. That trend is unlikely to change without a significant outlook improvement, and it may not come quickly.
