Insiders See Huge Bargains in Shares of Philip Morris (PM), Ford (F), Valeant (VRX)

Last week was a rough one for investors, as ten-year treasury yields pushed to seven-year highs and President Trump sounded skeptical about the U.S/China trade war coming to an amiable outcome, declaring that the country had become spoiled, along with the European Union and other countries.

With equities falling, insider buying activity was strong last week, peaking at 114 insider purchases on Friday, the highest single-day total of 2018. Among the companies that have seen noteworthy (non-trading plan) insider buying activity are several major names, including Philip Morris International Inc. (NYSE:PM), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), and Ford Motor Company (NYSE:F). We’ll take a look at the purchases made by the insiders of those companies in this article.

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Philip Morris International Inc. (NYSE:PM)

Several insiders of Philip Morris International Inc. (NYSE:PM) have bought shares in recent weeks, including Directors Jennifer Li (40,000 shares) and Werner Geissler (48,750 shares), as well as Science & Innovation President Miroslaw Zielinski (6,000 shares) and Jerry Whitson (3,000 shares), the company’s Deputy General Counsel and Corporate Secretary. There was a 17-month lull in insider buying prior to this recent surge, dating back to late-2016.

The insider buying spree follows Philip Morris International Inc. (NYSE:PM) shares taking a hard tumble on April 19, and they’ve drifted down by another 7% since then to sit at 23% declines in 2018. The company’s recent earnings report painted a gloomier-than-expected outlook for its smoke-less tobacco products, with sales of its iQOS e-cigarette tumbling by 6.1 billion units quarter-over-quarter in the first-quarter, though they were up by 88% year-over-year. Philip Morris, one of the Top 10 Biggest Tobacco Companies in the World in 2017, is seeking approval for the device in the U.S and Europe.

On the next page we’ll look at the insider buying at Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Ford Motor Company (NYSE:F).

Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

Who Bought Shares: Director Richard De Schutter

How Many Shares Were Bought: 15,000 @ $21.83 per share

Date of the Transaction(s): May 15

The Valeant Pharmaceuticals Intl Inc (NYSE:VRX) director bought up 15,000 shares on May 15, giving him ownership of 133,383 shares of the controversial pharmaceutical company, the shares of which have rallied by nearly 50% over the past six weeks.

Insiders are not the only ones who see further upside potential in Valeant Pharmaceuticals Intl Inc (NYSE:VRX). After a catastrophic collapse beginning in the middle of 2015, Valeant appears to have already hit rock-bottom and is now on the rebound under the leadership of CEO Joseph Papa, who took over the company two years ago.

In the first-quarter of this year, Valeant registered organic revenue growth for the first time in three years, with the bulk of those sales (70%) being from stable products with limited risk of large-scale sales declines. Among Valeant’s branded drugs that enjoyed strong quarters were the ulcerative colitis treatments Apriso and Uceris, and the Type-2 Diabetes treatment Glumetza.

Ford Motor Company (NYSE:F)

Who Bought Shares: Director John Lechleiter

How Many Shares Were Bought: 5,000 @ $11.17 per share

Date of the Transaction(s): May 11

John Lechleiter, one of the directors on Ford Motor Company (NYSE:F)’s board, raised his stake in the automaker by 17% on May 11, buying 5,000 shares to lift his ownership position to 35,000 shares. Shares of Ford have declined by 9% in 2018 and have been on a fairly steady downward trajectory over the past four years.

It hasn’t been a great year for Ford Motor Company (NYSE:F) on the sales front, with car sales being particularly sluggish, declining by 14% year-over-year through April. Of greater concern are Ford’s sliding SUV sales (down by 3.3%), which provide much higher margins than smaller vehicles. Ford’s profit margins slumped to just 3.7% in the fourth-quarter of 2017, down from 5.7% a year earlier, which Ford planned to rectify by hiking production of its Expedition and Navigator SUVs. Sales of those two vehicles were strong in April despite the overall SUV sales decline in 2018, with Navigator sales jumping by 135% year-over-year.

Disclosure: None