Following significant insider buying, UnitedHealthcare (UNH) still trades below the price where insiders and Berkshire Hathaway recently established positions. Bausch Health (BHC) is showing exceptional conviction after a key insider made a massive follow-on purchase of over $310 million. The CEO of biotech firm Curis, Inc. (CRIS) made his first-ever stock purchase ahead of potential clinical trial results expected by the end of the year. Similarly, insiders at Shift4 Payments (FOUR) and Xponential Fitness (XPOF) made their largest-ever purchases after price drops, signaling strong belief in a recovery. Conversely, multiple unscheduled insider sales at Hims & Hers Health (HIMS), including the CEO's largest ever, serve as a major red flag.

Healthcare Sector

• The podcast highlights the healthcare sector as a whole, noting that many large, well-established companies have seen their stock prices fall significantly due to missed earnings, poor drug trial results, or lawsuits.
• There is a notable divergence in insider activity, which can signal sentiment at specific companies.
  • Some companies are seeing significant insider buying, suggesting leadership believes the negative news is temporary and the stock is undervalued.
  • Other companies are seeing significant insider selling, which could be a red flag.
• Large investment funds are beginning to buy into these beaten-down healthcare stocks (as seen in 13F filings), suggesting a belief that the sector may be poised for a turnaround.

Takeaways

• The key insight is to pay attention to the actions of company insiders (insider trading) to gauge whether a stock's recent decline is a buying opportunity or a warning sign.
• When insiders buy large amounts of stock after a price drop, it's a bullish signal.
• When insiders, especially CEOs, make large, unscheduled sales, it's a bearish signal.

UnitedHealthcare (UNH)

• The stock fell significantly back in April after the company missed guidance and cut its forecast.
• In May, insiders responded by purchasing over $30 million worth of UNH stock.
• Famed investment firm Berkshire Hathaway also recently disclosed a position in the company.
• Despite a recent recovery, the stock is still trading below the price at which the insiders made their purchases.

Takeaways

• The significant insider buying, coupled with a purchase by a major firm like Berkshire Hathaway, suggests a high level of confidence in the company's long-term prospects.
• The fact that the current stock price is still below the insider purchase price could represent an attractive entry point for investors who share this bullish outlook.

Eli Lilly (LLY)

• The stock price dropped following disappointing results from its weight loss drug trials.
• Following the price drop, six different insiders stepped in to buy a combined $4 million of LLY stock.
• The stock was already up 6% in the week following the podcast's initial report on these purchases.

Takeaways

• Multiple insiders buying the stock simultaneously after bad news is a strong vote of confidence.
• This suggests that company leadership believes the market overreacted to the trial results and that the stock is undervalued.

Bausch Health Companies (BHC)

• The podcast previously highlighted a large, multi-million dollar insider purchase in BHC. The stock is up 10% since that report.
• The same insider, John Paulson, has now made another, much larger purchase of over $310 million worth of stock.

Takeaways

• A follow-on purchase of this magnitude is an exceptionally strong bullish signal.
• It indicates a very high degree of conviction from a major insider that the stock has significant upside potential.

Hims & Hers Health (HIMS)

• This company serves as a counter-example to the others in the healthcare sector. It has been negatively impacted by lawsuits, slowing revenue, and poor earnings.
• Insider activity here is bearish. Four insiders recently sold almost $40 million of HIMS stock.
• Critically, three of these were unscheduled sales.
• The CEO made his largest sale ever, which was also his only unscheduled sale ever.

Takeaways

• The insider activity at HIMS is a significant red flag.
• Unscheduled sales, especially from a CEO, can indicate a lack of confidence in the company's near-term future and may suggest that more bad news is on the way.

Centene Corporation (CNC)

• The stock has performed very poorly, falling over 50% in the last three months.
• Following this steep decline, the CEO has been buying stock, with a recent purchase of almost $500,000 in the open market.

Takeaways

• A CEO buying their company's stock after a massive price drop is a classic bullish signal.
• It suggests the leader believes the sell-off is overdone and the company is fundamentally sound.

Curis, Inc. (CRIS)

• This is a biotech stock that is down over 60% in the last year.
• The CEO recently bought the stock for the very first time.
• The company reportedly has clinical trial results or product launches expected near the end of the year.

Takeaways

• Insider buying in biotech companies ahead of clinical trial results or other major announcements can be a powerful indicator.
• The CEO's first-ever purchase ahead of these catalysts is a highly bullish signal, suggesting they may have confidence in a positive outcome which could cause a "massive price movement."

Shift4 Payments (FOUR)

• The stock price fell after the company reported poor earnings.
• The founder and executive chairman responded by buying $60 million worth of FOUR stock.
• This was noted as his largest purchase ever.

Takeaways

• A founder making their largest-ever purchase to "buy the dip" after weak earnings is a strong statement of belief in the company's recovery and long-term value. This is a bullish signal.

Xponential Fitness (XPOF)

• This is another example of an insider "dip buy."
• A director on the company's board made his largest purchase ever.
• The purchase was so significant that it increased his total holdings of XPOF by almost 270%.

Takeaways

• When an insider dramatically increases their stake by such a large percentage, it signals an extremely high level of conviction. This is a very strong bullish signal.