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Strong intraday buying could appear in both of those stocks
Every investor knows that the path to profits lies in low buying and selling high. That is a fundamental principle of any economic trading system. The trick, however, is to recognize when the stock is low enough to buy into. The key buy moment is when the stock hits at the bottom; that will yield the greatest yield when the share price starts to rise again. There are many potential clues that investors can use to find the price base; today, we look at internal buying trends. Insiders – the corporate officers, board members, and others ‘experienced’ – don’t just control the companies, they know the details. Legally, they have no right to trade that knowledge, or to trade it explicitly, and disclosure rules by government regulators help keep their minds honest. Their honest stock deals, however, can be very informative. These are the people who have the deepest knowledge of a particular stock. So when buying or selling, especially in large lots, be careful. In this case, we have used TipRanks Insiders Hot Stocks tool to find two stocks whose price has fallen recently – and that fall has coincided with some side trades within ‘informed purchasing’. Let’s take a closer look. Intercept Pharma (ICPT) We will start in the pharmaceutical sector, with Intercept, a specialist in the treatment of kidney liver disease. Intercept Pharma is working to develop a treatment for a number of chronic and serious liver diseases, including primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis (NASH). The company’s main fertilizer, obeticholic acid (OCA), was developed as an analog of CDCA bile acid, and can play a role in treating liver conditions through the FXR receptor pathway. OCA, also known as Ocaliva, has been approved by the US and European FDA for its use in the treatment of PBC. Intercept, in recent months, has seen significant changes. First, the company has gained experience in churning in the senior management. Effective last January 1, the company’s COO Jerome Durso moved up to the position of CEO, and earlier this month CFO Sandip Kapadia announced his resignation on March 26. His position will be filled on an acting basis by Rocco Venezia as a measurement interim. On the business side, the company reported 4Q20 results at the end of February. The release showed significant gains in OCA sales worldwide. Q4 net sales reached $ 83.3 million, up 18% year-over-year, while full-year sales grew 25% yoy to reach $ 312.7 million. The company led $ 325 million to $ 355 million for 2021 net OCA sales. On a negative note, EPS net loss in Q4 was worse than expected, coming in at $ 1.58 against a projected loss of $ 1.47. And, while OCA sales were up from last year, quarterly revenues were also lower than expected. Following the job release, the stock fell 19%. That loss came in addition to a difficult 9 months for Intercept. The stock is down ~ 74% over that period. The loss run began in June last year, when the FDA rejected an application for an OCA permit to treat NASH-related liver fibrosis. OCA is currently undergoing an extensive Stage 3 test for this condition, to support new applications for approval before the end of this year. There are no conventional medicines to treat NASH and its problems, and Intercept expects 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 amounted to $ 5.02 million, and is well worth it. Akkarju in the company now $ 13.95 million. Looking to the future, Wedbush’s Liana Moussatos remains optimistic. The 5-star analyst is rating the Outperform (ie Buy) ICPT, and its $ 88 price target means an upside of 331% over the next 12 months. (To view the history of Moussatos, click here) “We are making many changes to our model. Management plans submit the OCA / NASH NDA to the FDA with YE: 21. As a result, we pushed the U.S. launch date for OCA / NASH from 7/15/2022 to 2 / 15/2023 to allow sufficient time to meet FDA requirements and commercial preparation. We reduced our estimated PBC population from approximately 34K to 32K due to the impact of potential OCA / PBC labeling changes for patients reaching the most advanced levels of PBC, ” said Moussatos. Moussatos is the bullish outlier here; The bodies of a Wall Street analyst are clearly divided on this stock, as can be seen by the breakdown of the 14 recent reviews. These include 6 Buy, 7 Holds, and 1 Sell, making the consensus level as a Medium Buy. Share prices are at $ 20.40 and the average price target of $ 43.33 suggests upside of 112% from that level. (See ICPT stock analysis on TipRanks) Kinsale Capital Group (KNSL) Moving gears, we move over to the insurance industry, where Kinsale Capital is a provider of surplus and excess line insurance products. These are policies that customers adopt to protect against ‘excessive’ risk, or risks that are too high for their regular insurance company. Kinsale focuses specifically on these high-risk insurance products, and controls both claims and subscription processes. Kinsale has seen significant growth in revenue and earnings over the past year. At the main line, revenue in 4Q20 rose 51% to $ 139.33 million, while EPS, at $ 1.65 per share based on $ 38.2 million in net revenue, was up 109% from a year earlier. For the full year, Kinsale’s revenue reached $ 459.88 million, a 45% year-over-year gain. Full-year EPS rose from $ 2.86 in 2019 to $ 3.87 in 2020, a 35% yoy gain. The gains in revenue and revenue were driven by increases in the company’s key business segments. For both the quarter and the full year, Kinsale saw a sharp increase in total written taxes, net investment income, subscription income, and operating income on equity. The company ended 2020 with $ 1.3 billion in cash and assets invested, up 44% from December 2019. Despite the reported sound results, KNSL shares are down over the past three months. Shares peaked in mid-December, and have lost 35% since then. The fall in share prices has not discouraged Steven Bensinger, from the company’s Board of Directors, from increasing his holdings. On March 10, Bensinger bought two shares of stock with 3,500 shares, paying $ 607,000. This will bring his total ownership of the company to more than 30,000 shares, valued at more than $ 5.3 million. Wall Street loves this insurance company, and Casey Alexander, who covers the company for Compass Point, puts out a tough bull issue. “We still believe that the basic picture is still good for KNSL. E&S price growth continues to be strong (46% YoY) and subscription is highly profitable, leading to a unified industry-leading ratio … KNSL also claims a cost advantage with technology capability overrun on peers which should lead to additional redundancies. KNSL is making some progress towards the insuretech space, although it is moving cautiously as this new paradigm develops, ”Alexander chose. Alexander estimates Buy on the stock, and sets a $ 225 price target that shows room for 39% upside in the coming year. (To check out Alexander ‘s history, click here) Hard results in a traditional financial sector like insurance always get thumbs up on Wall Street, so it’s no surprise to see that Strong Buy consensus rating here is unanimous, based on 3 recent reviews. The stock has an average price target of $ 235, for a capacity above 45% of the current average price of $ 161.94. (See KNSL stock analysis on TipRanks) To find great ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that unites its all TipRanks fairness view. Disclaimer: The views expressed in this article are those of the emerging analysts. The content is intended for informational purposes only. It is very important to do your own analysis before making any investment.