If a CEO is buying shares in their own company, it’s often worth investigating the stock further. CEOs tend to have an intimate understanding of their businesses and are usually way ahead of analysts and portfolio managers when it comes to revenue and earnings trends.
In this report, we are going to highlight a large CEO buy at Veracyte Inc (VCYT:US). Veracyte is an American genomic diagnostics company. Using its diagnostic tests, patients can avoid risky, costly diagnostic procedures and reduce time to appropriate treatment. The company is listed on the NASDAQ Global Market and currently has a market capitalization of $1.2 billion.
Veracyte Inc: Insider Buying
Our data shows that on June 10, Veracyte’s CEO Marc Stapley purchased 60,000 shares at a price of $16.33 per share. This trade cost the insider $980,094 and increased his holding to 159,761 shares.
Mr. Stapley has extensive experience in the genomic diagnostics industry. Prior to joining Veracyte in June 2021, he was Chairman and CEO of Helix, a leading population genomics company. Prior to Helix, he served in key executive leadership positions, including CFO, at Illumina, the global leader in DNA sequencing and array-based technologies. Given his background, he is likely to have a good understanding of his company’s prospects.
What’s interesting about this trade from Mr. Stapley is that it has increased his holding by 60%. The fact that the insider has increased the size of his position by such a large percentage suggests that he is very confident the stock is set to rise.
Additionally, this trade represents the largest purchase from an insider since the company went public in 2014.
85% Top-Line Growth
Veracyte’s recent Q1 results showed that the company has momentum right now.
For the quarter, revenue was up 85% year on year to $67.8 million, while net loss was $14.5 million, an improvement of 65% compared to the first quarter of 2021. Meanwhile, test volumes grew to 23,245, an increase of 61% compared to Q1 2021. At the end of the period, the group had cash and cash equivalents of $163.6 million.
On the back of these results, the company raised its full-year guidance slightly. It now expects full-year 2022 total revenue of $265 million to $275 million (representing year-over-year growth of 21% to 25%) compared to previous guidance of $260 million to $275 million.
In light of these results, we see the insider buying here as a bullish indicator.