La Jolla Pharmaceutical Company (NASDAQ: LJPC) hasn’t exactly been a stellar performer over the past three years. Over that period of time, the price has gone from around $40 to as low as $2.50. After two separate rallies off of this level, the price finds it back at the same point with Friday’s close of $3.84. As the price is stabilizing at this level, one director and 10% owner just added a significant amount to his holdings.
The last earnings report was a big negative surprise, missing analyst estimates by 39%. With only two analysts providing revisions, the likelihood of large beats or misses is fairly high. While report missed estimates, the price didn’t respond all that negatively. President and CEO Larry Edwards discussed the report:
“With two, FDA-approved, innovative therapies for life-threatening diseases, La Jolla is well-positioned to help patients in need…By leveraging the stronger platform that the combined company will provide, we look forward to increasing patient access to these important medicines.”
Despite the news, Kevin Tang, director and 10% owner, added a significant number of shares on August 14. The purchase was for 431,647 shares at a trade price of $3.72. The addition was a 4.7% of his holdings and is in addition to the 615,129 shares bought on June 4.
Action to Take: The lack of bearish movement on the earnings, insider buying, and the price testing a support area near $3.50 is a bullish setup for another bullish move similar to March and November 2019. This provides a projected move in the coming weeks to months of $8.