Board Member at Beleaguered Burrito Chain Buys Shares After Barron’s Releases Grim Cover Story, Plus Other Noteworthy Insider Trading Activity

CEO of Beaten-Down Generic Drug Maker Purchases Shares

The man in charge of Lannett Company Inc. (NYSE:LCI) purchased a large block of shares earlier this week. Chief Executive Officer Arthur P. Bedrosian snapped up 10,000 shares on Monday at a price of $20.00 per share, a purchase that lifted the CEO’s ownership to 688,909 shares.

The manufacturer of generic pharmaceuticals has seen its market capitalization plunge by a disturbing 63% in the past two years. Lannett Company Inc. (NYSE:LCI)’s shares were seriously hit in early-November, when Bloomberg published an article revealing that, in connection with the U.S. Department of Justice’s investigations into Lannett and other generic drug makers, U.S. prosecutors might file criminal charges for suspected price collusion. According to the article, the grand jury probe focused on whether executives agreed among themselves to raise prices. Lannett’s shares fell by around 27% on that news. Nonetheless, Mr. Bedrosian said the federal antitrust investigation into potential price collusion would find that his company acted in full compliance with all applicable laws and regulations. Considering the CEO’s recent purchase of shares, he’s certainly putting on a brave face to the investor community, which should be heartening to Lannett investors. Ken Griffin’s Citadel Advisors added a 118,530-share stake in Lannett Company Inc. (NYSE:LCI) to its portfolio during the third quarter.

Board Member at Beleaguered Burrito Chain Buys Shares After Barron’s Releases Grim Cover Story

One member of Chipotle Mexican Grill Inc. (NYSE:CMG)’s Board of Directors also purchased a block of shares this week. Board member Matthew H. Paull bought 400 units of common stock on Monday at a price tag of $397.71 each, lifting his overall holding to 416 shares. The beleaguered burrito chain added Mr. Paull to its Board of Directors in late-December in a move to satisfy activist investor Bill Ackman, whose hedge fund Pershing Square initiated a 9.9%-stake in the company in September.

The insider purchase comes immediately after Barron’s released a grim cover story about Chipotle Mexican Grill Inc. (NYSE:CMG), which said that the shares of the burrito chain could fall by as much as 35% next year. “We see no reason to doubt that food safety at Chipotle is improving and that fans can eat there with confidence. We have reservations, however, about the safety of earnings forecasts and the share price,” said the cover story. Barron’s anticipates Chipotle’s shares will fall 10% this year, though the decline could reach as much as 35% in a worst-case scenario. Chipotle Mexican shares are down by 11% in the past year. Mr. Ackman’s Pershing Square owned 554,213 shares of Chipotle Mexican Grill Inc. (NYSE:CMG) at the end of September.

The final page of this insider trading article discusses fresh insider selling observed at two companies.