TipRanks
A strong purchase of privileged information may indicate a low point in these 2 stocks
Every investor knows that the path to profits lies in buying low and selling high. This is a basic precept of any economic trading system. The trick, however, is to recognize when the stock is low enough to buy. The main time to buy is when the stock hits rock bottom; this will maximize returns when the stock price starts to rise again. There are a multitude of possible leads that investors can use to find the minimum price; today, we’ll look at domestic purchasing trends. Insiders – corporate executives, board members and others “inside” – not only manage companies, they know the details. Legally, they must not commercialize this knowledge, or trade it shamelessly, and government regulators’ disclosure rules help keep insiders honest. Your honest stock transactions, however, can be highly informative. These are the people with the deepest knowledge of certain actions. So when you buy or sell, mainly in bulk, take note. In that case, we used TipRanks Insiders’ Hot Stocks tool to find two stocks whose price has recently dropped – and that drop coincided with some privileged ‘informational buying’ negotiations. Let’s take a closer look. Intercept Pharma (ICPT) We will start in the pharmaceutical sector, with Intercept, a specialist in the treatment of chronic liver diseases. Intercept Pharma is working to develop treatment for several chronic and severe liver diseases, including primary biliary cholangitis (PBC) and non-alcoholic steatohepatitis (NASH). The company’s main compound, obeticolic acid (OCA), was developed as an analogue of CDCA bile acid and may play a role in the treatment of liver disease via the FXR receptor pathway. OCA, also called Ocaliva, has received FDA approval from the US and Europe for use in treating PBC. Intercept has seen major changes in recent months. First, the company experienced a turnover in senior management. As of January 1, the company’s COO, Jerome Durso, took over as CEO and, earlier this month, CFO Sandip Kapadia announced that he will step down on March 26. measure. On the business side, the company released its 4Q20 results at the end of February. The launch showed significant gains in worldwide OCA sales. Net sales for the fourth quarter reached $ 83.3 million, an increase of 18% year-over-year, and full-year sales grew 25% year-over-year to reach $ 312.7 million. The company gave projections of $ 325 million to $ 355 million for OCA’s net sales in 2021. On a negative note, EPS net loss in the fourth quarter was worse than expected, reaching $ 1.58 against a expected loss of $ 1.47. And although OCA sales have grown compared to last year, quarterly revenue has also been below expectations. After the release of the result, the stock fell 19%. That loss came at the top of 9 difficult months for Intercept. The stock fell ~ 74% in that period. The series of losses began last June, when the FDA rejected an application for approval by the OCA to treat NASH-related liver fibrosis. OCA is currently undergoing an extensive Phase 3 test for this condition, to support new applications for approval by the end of this year. There are no current drugs to treat NASH and its complications, and Intercept predicts that the market could reach $ 5 billion in annual sales. Turning to insider trading, we see that Srinivas Akkaraju, of the Board of Directors, bought 237,000 shares of ICPT in three tranches between March 10 and March 12. The total cost reached $ 5.02 million, and Akkarju’s stake in the company is now worth $ 13.95 million. Looking to the future, Wedbush’s Liana Moussatos remains cautiously optimistic. The 5-star analyst evaluates ICPT as an Outperform (ie purchase), and its target price of $ 88 implies an impressive 331% increase in the next 12 months. (To follow Moussatos’ history, click here) “We are making several adjustments to our model. Management plans to resubmit the OCA / NASH NDA to the FDA until YE: 21. Consequently, we have postponed our US launch date for OCA / NASH from 7/15/2022 to 2/15/2023 to allow sufficient time to meet the requirements of the FDA and commercial preparations. We have reduced our estimated treatable PBC population from about 34K to 32K due to the impact of possible changes to the OCA / PBC label for patients who have reached the most advanced stages of PBC, ”noted Moussatos. Moussatos is the optimistic outlier here; The Wall Street analyst corps is clearly divided on this action, as the analysis from the 14 recent analyzes shows. This includes 6 purchases, 7 retentions and 1 sale, making the consensus rating a moderate purchase. The shares are quoted at $ 20.40 and the average target price of $ 43.33 suggests an increase of 112% from that level. (See the ICPT stock analysis at TipRanks) Kinsale Capital Group (KNSL) Changing the subject, we will move on to the insurance industry, where Kinsale Capital is a supplier of insurance products for surplus and surplus lines. These are policies that customers take out to protect themselves from “excessive” risks, or risks that are too high for their regular insurer. Kinsale focuses exclusively on these high risk insurance products and maintains control over its claims and underwriting processes. Kinsale saw significant growth in revenue and earnings last year. At the top of the line, revenues in 4Q20 increased 51%, to US $ 139.33 million, and EPS, from US $ 1.65 per share based on US $ 38.2 million in net revenue, was 109% higher the previous year. For the full year, Kinsale’s revenue reached $ 459.88 million, a 45% gain year over year. The full-year EPS rose from $ 2.86 in 2019 to $ 3.87 in 2020, an annual gain of 35%. The gains in revenues and revenues were driven by increases in all of the company’s main business segments. For the quarter and the full year, Kinsale saw significant increases in gross written premiums, net investment income, underwriting income and operating return on equity. The company ended 2020 with $ 1.3 billion in cash and invested assets, an increase of 44% compared to December 2019. Despite the solid results released, KNSL’s shares fell in the last three months. The stock peaked in mid-December and has lost 35% since then. The fall in the share price did not discourage Steven Bensinger, of the company’s Board of Directors, from increasing his participation. On March 10, Bensinger bought two shares of shares, totaling 3,500 shares, paying $ 607,000. This raises its total stake in the company to more than 30,000 shares, valued at more than $ 5.3 million. Wall Street likes this insurance company, and Casey Alexander, covering the company for Compass Point, makes a solid case. “We continue to believe that the basic fundamental framework remains positive for KNSL. Growth in E&S premiums remains strong (46% YoY) and underwriting is highly profitable, leading to an industry-leading combined index … KNSL also claims a technology-enabled expense advantage over its peers that should lead to redundancy additional reservation. KNSL is making some forays into the insuretech space, although moving cautiously as this new paradigm develops, ”said Alexander. Alexander values the stock as Buy and sets a price target of $ 225, which indicates room for a 39% rise next year. (To see Alexander’s track record, click here) Solid results in a traditional financial sector, such as insurance, will always win the thumb of Wall Street, so it’s not surprising to see that the strong buying consensus rating here is unanimous, with based on 3 recent reviews. The stock has an average price target of $ 235, for a potential increase of 45% compared to the current share price of $ 161.94. (See TipRanks KNSL stock analysis) To find good ideas for stock trading with compelling valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock insights. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investment.