Insiders Make Huge Buys in Gold Miners and More

In the past week or so, a couple of gold-mining stocks attracted the attention of insider buyers. One of those buyers was billionaire hedge fund manager John Paulson, who boosted his stake in a Canadian healthcare company as well.

Meanwhile, an independent upstream oil and gas company and a maker of consumer electronics also saw some big insider purchases. Let’s take a quick look at these notable transactions of the past week.

Is Insider Buying Important?

A well-known adage reminds us that corporate insiders and 10% owners really only buy shares of a company because they believe the stock price will rise and they want to profit from it. Thus, insider buying can be an encouraging signal for potential investors. This is all the more so during times of uncertainty in the markets, and even when markets are near all-time highs.

The first-quarter earnings-reporting season is all but over, so few insiders are prohibited from buying or selling shares for now. Below are some of the most notable insider purchases that were reported recently, starting with the largest and most prominent.

• Buyer(s): member of a 10% owner, Paulson & Co.
• Total shares: less than 7.6 million
• Price per share: $13.20
• Total cost: nearly $100.0 million

This family office founded by billionaire hedge fund manager John Paulson took advantage of a public offering of shares of Idaho-based gold miner Perpetua Resources Corp. (NASDAQ: PPTA). The company recently posted quarterly results and held its annual meeting.

The stock pulled back sharply after the secondary offering was announced, and the share price was last seen below the offering price. However, the stock is still trading for about 34% more than 90 days ago and over 64% more than a year ago. Analysts anticipate that shares will rise 65.2% in the next 52 weeks to their consensus price target of $21.12 apiece. All four analysts who follow the stock recommend buying shares.

Note that the buyer also bought shares of International Tower Hill Mines Ltd. (NYSE: THM) earlier this year. Paulson himself acquired some Bausch Health shares last week (see below).

• Buyer(s): a director
• Total shares: more than 6.3 million
• Price per share: $5.05 to $5.95
• Total cost: over $35.8 million

Canada-based maker of generic pharmaceuticals, medical devices, and over-the-counter products Bausch Health Companies Inc. (NYSE: BHC) posted disappointing top-line and bottom-line results for the first quarter. The stock pulled back after the report but recently recovered after news of director John Paulson’s purchase of shares.

On last look, the stock was trading for more than the purchase price range above. It is down 18.6% in the past 90 days and 40.1% lower than a year ago. The $7.43 consensus price target suggests that analysts see 28.1% upside in the next 12 months. Yet, on average they rate the stock at Hold.

Note that Paulson recently predicted the price of gold could hit $5,000 by 2028 (see the Perpetua Resources purchase above).

Hycroft Mining

• Buyer(s): 10% owner Eric Sprott
• Total shares: over 6.3 million
• Price per share: $3.50
• Total cost: more than $22.2 million

This legendary investor also bought into a gold miner, boosting his Hycroft Mining Holding Corp. (NYSE: HYMC) stake to almost 8.2 million shares. This transaction was part of a public offering of stock.

The stock retreated from a 52-week high near $4.70 on news of the public offering. The share price is less than the offering price but is still 50.2% higher than six months ago. One analyst covers the stock and has a Hold rating on the shares.

Note that the chief executive officer and two other executives sold some shares earlier in June.

Mach Natural Resources

• Buyer(s): a director
• Total shares: over 525,500
• Price per share: $13.48 to $15.00
• Total cost: almost $7.6 million

Anadarko Basin-focused independent upstream oil and gas company Mach Natural Resources L.P. (NYSE: MNR) fell short of Wall Street’s earnings expectations in last month’s quarterly report, despite a recent acquisition that doubled its acreage position. However, the company did reduce its net debt ratio.

The share price is 12.7% higher since that earnings report, as well as about a dime higher than the top of the purchase price range above. The $22.50 consensus price target is higher than the 52-week high and would be a gain of 50.0% for the shares in the next 52 weeks. All four analysts that cover the stock recommend buying shares.

Note that this same director acquired more than 5 million shares back in February and is a beneficial owner.

Sonos

• Buyer(s): 10% Coliseum Capital Management
• Total shares: nearly 651,600
• Price per share: $9.80 to $10.36
• Total cost: almost $6.6 million

Last month, the interim chief executive of Sonos Inc. (NYSE: SONO) said this consumer electronics company had turned a corner. Investors seem to agree, as the stock is up 12.3% since then. The share price was last seen still within the purchase price range.

Analysts have a consensus price target of $11.82, which represents an increase of 17.8% gain for the shares in the coming year. Two of five analysts have Buy ratings, while one has a Sell rating. That is the same as a month ago.

Note that the buyer’s Sonos stake is over 12.3 million shares. It also purchased $7 million worth of Owens & Minor Inc. (NYSE: OMI) shares back in April.

And Other Insider Buying

In the past week, some insider buying was reported at Agree Realty, American Homes 4 Rent, Builders FirstSource, Chubb, Conoco Phillips, Energy Transfer, PVH, Robinhood Markets, Smithfield Foods, J.M. Smucker, Topgolf Callaway Brands, and Vishay Intertechnology as well.

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