Key Points
- Insider buying can be a telling indicator of future share prices, and no insider is better than the CEO.
- However, CEO buying isn't enough to support price action; it takes institutional and analyst involvement to keep a stock running.
- This is a look at the five hottest CEO buys from Q1 and if their share prices can continue higher in Q2.
- 5 stocks we like better than Sphere Entertainment
Insider buying is good. It shows management’s confidence in a business, helping to support investor sentiment, and no insider is more significant than the CEO. Who else is as up-to-date on a business's health and outlook as the person in charge? This is a list of the five most significant CEO purchases in Q1 2024 based on dollar volume.
#5 Allegion CEO John Stone Bought Shares In Q1
Allegion NYSE: ALLE is a Dublin-based security firm focused on doors. It manufactures and supplies mechanical and electronic devices for door security, including software and operating systems for IoT devices. The company is applying AI today and generating profits. John Stone, the company CEO, purchased shares in Q1 worth more than $1.3 million, putting him and Allegion in the #5 position.
The company is expected to produce solid results this year, but the share price may need help moving higher. Analysts' sentiment has dimmed due to the recent rally in share prices and valuation. They rate the stock at Hold and see it moving 5% lower at the consensus. The consensus is up compared to last year but flattened following the latest earnings report, which is a drag on the price action. Other insiders, including several senior VPs, have been selling, which may add to the headwinds.
#4 Marpai, Inc CEO Triples Holdings In Q1
Marpai, Inc.’s NASDAQ: MRAI CEO made two purchases in Q1 that effectively tripled his position. A director's purchase compounded his buys, bringing the total inside holding to 61%. The buys are notable because other Q1 news includes better-than-expected results and an outlook for hyper-growth over the next few years. The company’s AI-powered business services are aimed at disrupting the billion-dollar self-insured employer marketplace, and they are gaining traction. A well-received investor conference led to an upgrade to Buy from Hold by Maxim Group. Maxim set a price target of $6 or more than 150% upside from the current price action.
#3 Keurig Dr Pepper CEO Sinks $5 Million Into KDP Shares
In March, Keurig Dr Pepper’s NASDAQ: KDP CEO bought nearly $5 million of KDP shares. Added to the CFO's purchase, insider buys topped $750 million for the quarter but were offset by institutional selling. Major shareholder JAB Holding has been trimming its position but still holds over 20% of the stock. The CEO's purchase brings his total to about 0.22% and insider holdings to 0.8%. Institutions other than JAB Holdings have been buying on balance for more than five quarters, and their activity is steady. Ten analysts rate this consumer staples stock as a Moderate Buy and view it as a deep value, trading beneath the low end of the target range, with more than a 15% upside at the consensus.
#2 Snowflake’s New CEO Buys Another $5 Million in Shares
Snowflake NYSE: SNOW made big news when it announced a surprise CEO transition. The new CEO is Sridhar Ramaswamy, an existing exec, and he celebrated the appointment by buying more shares. His purchase topped $5 million, bringing his holdings to over 224,000 shares. He holds about 0.06% of the company, insiders and major shareholders own about 8% together. Institutional activity is also bullish in Q1, ramping and spiking from Q4, with net buys double the sales. Institutions own about 65% of the stock; analysts rate it as a Moderate Buy with about 30% upside at the consensus.
#1 Sphere Entertainment is the #1 Stock Bought By a CEO in Q1
Sphere Entertainment NYSE: SPHR, formerly Madison Square Garden, is #1 on the list of CEO buys. CEO James Lawrence Dolan made three purchases for $11 million. These are significant because they include the largest purchase by an insider and two additional trades on par with that amount. His holdings are nearly 1.5% of the company, bringing total insider and major shareholder ownership to 25%. Institutions are also buying and own a total of 92%. Analysts rate the stock as a Hold but see it trading significantly above the top-end of their target range.
Before you consider Sphere Entertainment, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Sphere Entertainment wasn't on the list.
While Sphere Entertainment currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
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