How do you find the right stocks to buy? It’s a simple question, but the answer can be a challenge. Fortunately, there are numerous signs and signals that can help you with your decisions.
One of the clearest signals comes from corporate insiders, the corporate officers who operate in the C-suites and boardrooms and are responsible not only for the day-to-day operations of their companies, but also for ensuring profits and returns for shareholders. . The first point gives them an in-depth knowledge of how their business runs and what it has in store; the second makes them keep an eye on the gold ring. Taken together, both points ensure that insiders will only buy their own shares if they know they will increase in value. And that makes insider transactions a valuable signal for private investors.
Federal regulations require company officials to keep public their transactions in their own company stock, giving us a valuable resource in detecting insider transactions. Using the Insiders’ Hot Stocks tool, available at TipRanks, we looked up the details of some of them – and found that the insiders are pouring millions into two stocks in particular. Let’s take a closer look.
Tectonic therapy (TECX)
We start in the world of biotech and pharmaceutical research, where Tectonic Therapeutics is a clinical-stage research company working with G-Protein Coupled Receptors, or GPCRs, to develop a range of new drug candidates. GPCRs are receptor molecules involved in the regulation of multiple features of human biology. They are found on cell surfaces and their involvement in blood pressure regulation, glucose metabolism, immune function and neuronal signaling makes them attractive targets for Tectonic’s therapeutic research.
Tectonic’s research program is based on the company’s proprietary technology platform, the GEODe, which it uses to discover and develop new biologic medicines for its clinical pipeline. The company’s drug candidates target conditions with, as the medical jargon puts it, “high unmet medical needs,” meaning there are no effective treatments, or at best only a few treatments with limited benefits.
The lead candidate in Tectonic’s pipeline, and the only one currently undergoing human clinical trials, is TX45. This drug candidate is being developed and studied as a new treatment for pulmonary hypertension, or high blood pressure in the bloodstream to the lungs. The drug is described as a ‘Fc-relaxin fusion protein’ and is potentially best in class. Tectonic is studying the drug as a means to improve patient outcomes for group 2 pulmonary hypertension by utilizing the vasodilatory and antifibrotic properties of relaxin.
Last September, Tectonic released favorable data from the Phase 1a trial of TX45. The study focused on safety, tolerability and PK/PD results, and the data will be used to identify doses for the Phase 2 trial, which started in August this year. Results from the Phase 2 study are expected in 2026.
Turning to the insiders, we discover that Timothy Springer, member of the company’s Board of Directors, bought 300,000 shares of TECX last month – for which he paid an impressive amount, just over $10 million. Springer currently owns more than $197 million worth of Tectonic stock.
For biotech expert Yasmeen Rahimi of Piper Sandler, the positive outlook for TX45 is the most important thing for investors to consider. She writes: “We were pleased to see TECX report positive TX45 Ph1a data demonstrating favorable PK/PD with clean safety/tolerability. Although the topline reveal was naked, the mgmt will present these results in a poster at the AHA (Nov. 16-18, where general summaries are embargoed until Nov. 11). Accordingly, we believe this will be an important stock move to further de-risk TX45’s RXFP1 agonist MoA.”
Looking ahead, Rahimi added: “Ahead of TX45 Ph1a HV at AHA, detailed data types are expected, which strengthened the preclinical PK/PD modeling driving Ph2 dosing. Furthermore, the hemodynamic Ph1b PoC is forecast for Q2 25, so the mgmt reiterated that a 15-20% reduction in both PVR and PCWP would be a clear win, and would strengthen the PoS for Ph2 APEX… All in all although we remain very bullish on TECX and see significant upside potential from several direct and indirect catalysts in the year ahead.”
That substantial upside is encapsulated in an Overweight (Buy) rating and a $76 price target, suggesting a robust one-year upside of 69.5%. (To view Rahimi’s track record, click here)
Overall, this stock boasts a unanimously positive Strong Buy consensus rating from the Street, based on four positive reviews on file. Shares are trading at $44.85 and the average price target of $65.50 suggests a 46% upside over the next twelve months. (To see TECX stock forecast)
CoStar Group (CSGP)
CoStar Group, the second stock we look at here, is a technology company with a focus on data. CoStar provides data services, including intelligence, analytics and marketing, to the commercial and residential real estate industries, making it easier for buyers to find properties, gain business insights and make connections to improve their real estate businesses. In business for more than 38 years, the company is based in Washington, DC and has 72 offices with locations in 14 countries.
CoStar’s goal is to digitalize the global real estate market, bringing smoother transactions and putting more resources in the hands of both buyers and owners. The company operates in the US and Canada and has a strong presence in Europe. It also has offices in East Asia, Australia, South America and the Middle East. The key point: the specific locations in these areas all have reputations as sought-after real estate markets.
However, US real estate markets have struggled in recent years, due to high interest rates driving up mortgage costs, and CoStar shares are down almost 14% this year. The company’s online home products brand, Homes.com, has seen a slowdown in net new sales, putting pressure on the stock. More recently, the company’s Q3 24 results and guidance fell largely below expectations.
Third-quarter results showed revenue of $693 million, up 11% year over year, but about $3.11 million below forecast. Earnings, at 22 cents per share by non-GAAP measures, beat expectations by 6 cents. However, the company targeted 9% year-over-year revenue growth in the fourth quarter, with expected revenue of $703 million lower than the fourth-quarter consensus estimate of $713.9 million.
The stock’s pullback should be attractive to one insider. Andrew Florance, the company’s president and CEO, recently purchased 14,731 shares, paying just under $1.1 million for the shares. He currently owns $95.16 million worth of CoStar stock.
CoStar has caught the attention of Baird analyst Jeffrey Meuler, who believes the share price decline is overdone and represents a buying opportunity at current levels. He says of this company: “We find the valuation attractive based on ‘core’ earnings and believe the market is pricing in significant negative value for Homes.com. Meanwhile, bookings may be at/near a trough due to company-specific factors, while end-market conditions may also improve. Homes.com’s losses are also likely at/near peak (with significant spending over the medium term) and Homes.com’s near-term bookings expectations are low (helping viability in coming quarters) .
These comments support Meuler’s Outperform (Buy) rating here, while his $100 price target implies the stock will gain 33.5% heading to the one-year horizon. (Click here to view Meuler’s track record)
There are 12 recent reviews available for this stock, and their 8 to 4 breakdown favoring Buy over Hold gives CSGP a consensus rating of Moderate Buy. The stock is selling for $74.87, and the average target price of $90.09 suggests a potential for a 20% upside this coming year. (To see CSGP Stock Prediction)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.
