Insider Buying Could Indicate a Bottom in These 2 Stocks
Every fisherman knows that there’s good eating to be found on the seafloor and river bottoms. Flounder, halibut, sole, catfish – bottom dwellers are known for their good taste. And sometimes, the same can be said in the stock market.
Share prices can fall for a wide range of reasons, and the market’s bottom fishers take advantage of that. The key is to find the best tasting morsels – those stocks that are priced low, but undervalued, and are not falling due to some fundamental flaw. There are plenty of reasons, legitimate reasons that don’t indicates unsoundness, for a stock’s price to collapse. These can include panic selling in a general market fall, price declines in a particular industry, temporary economic issues. The result is an opportunity to practice the ultimate value strategy — buy in while the stock is weak.
It’s good to look for a signal that a low share price doesn’t indicate weakness – and one strong signal can be found in the insider buying habits. Insiders are corporate officers, with high-level knowledge of a company’s inner workings and prospects – knowledge that gives them a leg up when it comes to trading.
With this in mind, we’ve used the TipRanks Insiders’ Hot Stocks tool to find two stocks whose price has dropped recently – and that drop has coincided with some ‘informative buy’ insider trades. Let’s take a closer look.
Allogene Therapeutics (ALLO)
We’ll start by looking at Allogene Therapeutics, a clinical-stage biopharmaceutical company. Allogene gets its name from its prime research focus, on the development of allogenic chimeric antigen receptor T-cell (AlloCAR T) therapies. This is a class of precision medicines used in cancer treatment. Allogene’s pipeline follows 5 drug candidates, in various early stages of preclinical and clinical testing.
Allogene’s shares have been falling steadily for the past 12 months; the stock is down 63% in that period. However, the company has recently reported some positive news on the development front, and from the FDA, which has potential to provide a catalyst for the shares.
Last month, the company reported positive results from two Phase 1 clinical trial programs. The ALPHA1 and ALPHA2 trials, two trials of drug candidates ALLO-501 and ALLO-501A, target non-Hodgkin’s lymphoma. The company’s announcement indicated that the ALPHA trials had demonstrated AlloCAR T therapy to be safer and more durable than current autologous cell therapy when used in CAR T naïve patients. The new therapy showed a ‘consistent and manageable’ safety profile, and long-term complete response rates reached 15 to 18 months. The company has initiating plans to proceed on toward Phase 2 trials as a follow-up.
The second positive clinical news was about the Phase 1 UNIVERSAL trial, a program evaluating ALLO-715 as a treatment for multiple myeloma. The company released updated data, which showed a well-tolerated safety profile for the drug candidate, as…
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