Baker Bros Advisors LP, a major holder and director at
Incyte Corp (INCY), recently added 1,595,519 shares to their holdings. The buy came to a total purchase price just under $115.6 million, and is a rough doubling of the fund’s holdings in the company.
This represents the first insider buy since February, when the company president bought $1 million in company shares. Otherwise, company insiders have generally been regular and steady sellers over the past year.
Overall, insiders own about 1.5 percent of company shares.
The biotech stock, working on solutions for cancers and leukemia, have shed about 16 percent in the past year, far underperforming the S&P 500 by about 40 points.
However, the company is currently making money, and shares are trading at 16 times forward earnings on the back of a 31 percent jump in revenue over the past year.
Action to take: This biotech play is down heavily over the past year, but shares have started to trend up in recent weeks. If that trend continues, it could have a market-beating performance in the next year. Investors may like shares for those capital gains, but there’s no dividend at present.
For traders, the large investment here from a major player that already owns a major stake could be a sign of a continued move higher in the coming months. The March $80 calls, last going for about $3.90, could see high-double to low-triple digit gains from here if shares continue their uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
