3 Hot Trades for Insiders, But Are They Good Buys for Investors?

Insider activity increased in stocks such as Hudson Pacific Properties (NYSE: HPP), NeoGenomics (NASDAQ: NEO), and Carvana (NYSE: CVNA), signaling opportunities for traders and investors alike. The question is what those opportunities are, and what investors might do about them. This article examines who is buying, the forces driving their underlying markets, and what the potential upside may be, if any. 

Hudson Pacific Properties: The Bottom Is In 

Hudson Pacific Properties is a small, West Coast-oriented REIT focused on the tech and media industry. It owns and operates various properties, including sound stages for the production and development of media projects. In early June, insiders ranging from a handful of directors to the CEO, CIO, COO, and several EVPs and VPs bought direct ownership shares. 

The purchases were made simultaneously as a show of faith in the company’s recapitalization efforts. These efforts include a stock offering, of which a single, large investment firm has already claimed half. The purpose of the recapitalization is to reduce and reposition debt, thereby strengthening the balance sheet to focus on growth opportunities. The investment by Cohen & Steers is a sign that institutions, which collectively own about 98% of the floating stock, have confidence in the turnaround effort and growth prospects.

Analysts, likewise, have begun to show renewed confidence in the stock. The Q2 activity tracked by InsiderTrades includes increased coverage, firming sentiment, and positive price target revisions that end the downtrends in place. The takeaway is that this stock is bottoming out on a variety of factors, including its business outlook and sell-side sentiment, as reflected in the views of insiders, institutions, and analysts. The stock price, which is up significantly from its recent lows, can continue to rebound in this scenario and may easily surpass the consensus forecast for a 25% gain.

NeoGenomics: Insiders Buy It at Long-Term Lows

NeoGenomics is a small diagnostics firm that conducts tests for the cancer healthcare industry, as well as a wide range of other services. Its business is growing and profitable, and is expected to accelerate revenue and earnings growth over the next few years. The stock price recently pulled back to long-term lows, aligning with the bottom of a potential trading range, where insiders ranging from the CFO to the CEO started buying. Their activity is slight, but it increases their holdings, demonstrating confidence in the company’s future. 

Institutions own the remaining 98% of the shares, presenting a problem for investors. They sold on balance in Q1 and quarter-to-date in Q2, presenting a headwind for the market. If that trend continues, the stock price will struggle to advance and hold its gains. However, the potential for gains is substantial. The analysts lowered their price targets in H1 2025, but the market overcorrected, presenting a deep-value opportunity. It is more than 20% below the analyst's lowest price target and almost 100% below the consensus. 

Carvana Insider Take Profits: Gains Capped in 2025

Carvana stock has seen an impressive price gain over the past two years, but the trend is likely to be over. Although the business remains healthy, insiders, including the CEO, CFO, and major investors such as the CEO’s father, are selling and can be expected to continue doing so in 2025. These insiders purchased CVNA stock heavily while it was at its lowest point and have since made quadruple-digit gains. There is no reason for insiders not to sell, other than the fact that their impact is driving the price of the stock too low, and they are a significant force owning nearly 15% of the stock.

Analysts are confident of the company’s future and have been leading the stock higher with their price target revisions. The problem at the end of Q2 2025 is that the stock is trading in the high-end range, well above the consensus estimate, with limited upside potential. In this scenario, the stock price may increase to retest the recent and then the all-time highs, but will likely top out without a new catalyst emerging. 

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