There’s an old saying on Wall Street that there are many reasons to sell a stock, but only one reason to buy: You think the price will go up. That saying is especially true when it comes to executives or board members buying up the stock of a company they manage or oversee. Known as “insider buying,” senior leadership purchases shares is viewed as a sign of confidence in the future direction of a company. After all, nobody knows what is going on inside an organization better than the executives who run the daily operations and the board members who oversee the strategic direction of a company.
That is why investors and traders pay special attention any time there is insider buying within an organization, especially when a share price has been in decline. Insider purchases are often one of the first signs that a stock is about to turn around. Here are three stocks seeing heavy insider buying right now.
Nike (NKE)
Bob Swan, who previously served as CEO of chipmaker Intel (NASDAQ:INTC) and now sits on the board of directors at Nike (NYSE:NKE), has been buying shares of the sneaker giant as its stock has continued to slump. Swan paid $1.3 million on Oct. 2 for 13,072 shares of NKE stock, buying them at an average price of $96.13 each on the open market. Documents filed with the U.S. Securities and Exchange Commission (SEC) show that Swan now owns 18,005 Nike shares in a personal account and another 1,580 shares through a family trust.
Swan, who was CEO of Intel from 2019 to 2021 and now works at venture capital firm Andreessen Horowitz, bought NKE stock as it has steadily declined this year, dropping 17% since the start of January. Nike’s share price has been pressured by mixed financial results, stubbornly high inventory levels and an economic slowdown in China that has hurt consumer spending. The recent NKE stock purchase was Swan’s first since he joined the company’s board of directors in September 2022, though he owned shares prior to joining Nike’s board.
First Citizens BancShares (FCNCA)
First Citizens BancShares (NASDAQ:FCNCA) is well-known for buying distressed Silicon Valley Bank out of government receivership this past spring. The stock has been skyrocketing since it purchased the bank, giving its earnings a boost in the process. First Citizens now has $200 billion in assets and 500 branches in 23 states. Year to date, FCNCA stock is up 85%, far outpacing nearly every other bank stock. The strength in the shares has not been lost on First Citizens CEO Frank Holding, who has been buying up the stock lately.
The latest regulatory filings show that Holding paid $293,250 on Sept. 19 to purchase 255 shares of First Citizens Class B stock at an average price of $1,150 each. The Class B stock provides stockholders with 16 votes per share, while the Class A shares carry one vote each. Holding bought 110 Class B shares through his personal account, while 145 additional shares were acquired through custodial accounts. Holding now owns a total of 524,988 Class A shares and 97,442 Class B shares of First Citizens BancShares in his personal account.
Coty (COTY)
Regulatory filings show that a member of the board of directors at beauty company Coty (NYSE:COTY) recently purchased stock through what was a global share offering. On Sept. 28, Coty sold an additional 33 million shares at $10.80 each, which was below the closing price of $11.02 the previous day. Coty board member Mariasun Aramburuzabala Larregui swooped in and bought 500,000 shares at $10.80 each, spending about $5.4 million on the transaction.
According to filings with the SEC, Aramburuzabala bought the COTY stock through a limited partnership that now owns 1.43 million shares of the company. She previously bought $10 million worth of COTY stock in November 2021 at an average price of $10.89 a share. The latest purchase was made as Coty’s share price rebounds following reports this summer that celebrity endorser Kim Kardashian was planning to buy back Coty’s stake in her beauty firm Skkn by Kim. So far this year, COTY stock is up 13%.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.