Insider buying can often provide some vital clues about a stock’s potential. Insiders may sell their company’s stock for a variety of reasons. But they only buy stock for one reason – they expect it to go up.
Here, we are going to highlight a large purchase of stock by a company founded by an insider at Alphatec Holdings Inc (ATEC:US). Alphatec Holdings is an American Healthcare Equipment companythat designs, develops, and advances technologies for the surgical treatment of spinal disorders. It’s listed on the NASDAQ Stock Exchange and currently has a market capitalization of $1.09 billion.
Alphatec Holdings Inc: Insider buying
Form 4 filings show that on 18 December, Squadron Capital, a Private Equity fund founded by David Pelizzon, a Director Alphatec Holdings, purchased 1.35 million ATEC shares at a price of $11.11 per share. This purchase cost the fund approximately $15 million.
Positive insider sentiment
This purchase by Squadron Capital is noteworthy because it has increased its holding by 125%. This suggests that Pelizzon is very bullish on Alphatec’s future prospects, despite the stock trading around all-time highs. Additionally, our Insider Model views this buying activity as positive.
Alphatec Holdings had a strong Q3 with total revenue of $41.2 million, up 43% year-over year. The gross margin stood at 72.7% in the US, which accounts for the majority of Alphatec’s business. New products accounted for 70% of Q3 revenue in the US and revenue per case in the US increased by 13%.
The outlook statement was incredibly bullish. Pat Miles the Chairman and CEO commented: “This marks our eighth consecutive quarter of double-digit revenue growth. I could not be more confident in ATEC’s future. Our best is yet to come.”
Given this news, and the upbeat tone from management, we see the insider buying here as a bullish signal. It suggests that the insider feels that there is more growth in the share price to come.