Connect with us

Business

Billionaire CEO’s stock purchases could signal market bottom

Published

on

 


Saran_Poroong/iStock via Getty Images

Billionaires, CEOs and insiders have been on a buying spree lately, with major indices trading at much lower levels. The S&P 500 is down 17% year-to-date while the NASDAQ is down 27% year-to-date.

Chart
Data by YCharts

I find it interesting to follow insider buying closely because CEOs know more about their company than anyone else.

With all the fear in the markets, I’m not surprised billionaires are buying rundown stocks that have been oversold.

I don’t have a crystal ball but we can use this data to determine the best entry points for our personal portfolios.

Billionaires buy stocks

Here is a list of recent insider buying of billionaires who bought shares in their own company or stakes in another company in Q2 2022:

  • Starbucks founder and interim CEO Howard Schultz bought 137,500 shares of SBUX for a total of $10 million.
  • Spotify CEO Daniel Ek bought $50 million of SPOT shares.
  • FTX founder and CEO Samuel Bankman-fried bought a 7.6% stake in Robinhood (HOOD).
  • Shopify CEO Tobi Luke bought $10 million worth of SHOP stock.

That’s enough buying activity to indicate that these CEOs believe stocks are trading at a discount to their intrinsic values.

Follow smart money

Why is this trend so important? Because it’s exactly the opposite behavior of what Wall Street billionaires were doing in November 2021.

The billionaires were dumped stocks last year, including Elon Musk who posted the infamous Twitter poll asking his followers if he should sell Tesla stock.

Elon Musk posted this tweet on November 6, 2021, which ended up being close to the NASDAQ all-time high of 16,212.

Chart
Data by YCharts

Now Elon Musk and other billionaires are redeploying capital to the markets while retail investors are in panic mode.

If billionaires buy stocks, why not retail investors? Now is the time to build a strong watchlist and grab stocks that are either down from all-time highs or trading near their net asset value.

List of 10 growth stocks that are oversold

I’ve put together a simple chart of 10 growth stocks that are down significantly and trading at relative discounts to their cash value per share.

Company name (symbol)Redemption value per share52 week change
Arcimoto (FUV)$0.44-50%
Arrival (ARVL)$1.26-92%
Charging station (CHPT)$0.94-59%
Coinbase (COIN)$43-79%
Digital Marathon (MARA)$4.78-56%
Matterport (MTTR)$1.44-62%
Joby (JOBY)$2.14-57%
Robin Hood (HOOD)$7.30-76%
SoFi (SOFI)$0.60-64%
Beginner (UPST)$11.74-72%

There are also large cap buying opportunities

I also view mid- and large-cap stocks such as Coinbase (COIN), Netflix (NFLX), Roku (ROKU), Shopify (SHOP), Amazon (AMZN) and Disney (DIS) as strong candidates for purchase.

These stocks are suitable for larger, more mature portfolios due to their much higher market capitalization and price.

If you’re a newbie investor, you should probably invest in small and mid cap companies first to help your portfolio grow faster. Large caps are good for security, but many of the aforementioned companies have become quite large, so you won’t get the highest returns.

Risk factors

Is it the stock market bottom or just a dead cat bounce? The Fed plans to raise interest rates multiple times in 2022 and we all know how much higher interest rates hurt stock market valuations.

If the market reacts negatively to further rate hikes, stocks could plunge much lower. However, I think the NASDAQ and S&P 500 have reached long-term support levels and much of the selling pressure has been reduced.

It is also likely that several companies will file for bankruptcy or simply run out of cash this year. SPACs are certainly at risk of running out of cash due to supply chain issues and a general lack of additional capital.

For example, Lordstown Motors (RIDE) was forced to sell some assets to Foxconn for $230 million just to stay afloat. Cash burn will affect many businesses throughout 2022, so it’s something to watch.

Conclusion

If you’ve been in the markets since November 2021, it looks like you survived the worst part of the crash. Many other investors pulled out of the markets because they couldn’t handle the losses and the volatility.

If you sold your shares last November or December, then congratulate yourself. Now might be a good time to consider buying back into the market and taking your portfolio to the next level.

If billionaires buy stocks again, what do we have to lose?

Sources

1/ https://Google.com/

2/ https://seekingalpha.com/article/4511498-billionaire-ceo-stock-buys-signal-market-bottom

The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos

ExBUlletin

to request, modification Contact us at Here or [email protected]