It is always bullish for chief executive officers to buy heavily, as is presently happening at Opko Health (NYSE: OPK
), Dole Foods (NYSE: DOLE
), and Sears Holding (NYSE: SHLD
While the chief executive officers at Dole Foods and Sears Holding have been buying heavily, Dr, Phillip Frost has taken it to a whole new level at Opko Health, a medical device company. Dr. Frost has been buying large and buying steadily. His most recent purchase was 372,500 shares at $4.17 a share. That buy increases his total holdings to well over 116 million shares.
Investing legend Peter Lynch has stated that insider buying is always a good sign. According to Lynch, who guided the Fidelity Magellen mutual fund to annualized returns of 29.2% from 1977 to 1990, there are many reasons for an insider to sell. These can range from the need for cash to buy a home or pay tuition. But there is only one reason for an insider to buy and that is the expectation the share price will rise.
Dr. Frost has continued buying though the share price at Opko Health has been steadily declining. Opko Health is down for the week, month, quarter, last six months and previous 52 weeks of market action. Year to date, Opko Health is off by 14.69%.
For the year, however, the earnings-per-share growth for Opko Health is up by 47.47%. It receives the highest mean analyst target rating of a 1 (1 is a Strong Buy with 5 being a Strong Sell). Now selling around $4.18 a share, the mean analyst target price for Opko Health over the next year of market action is $8.25.