Opko Health’s CEO Is Scooping Up Shares Fast. Time To Buy?

in INVESTING IDEAS by

Insider Buying: Opko Health

Phillip Frost, CEO & Chairman, bought 55,000 shares of Opko Health (NasdaqGS: OPK) worth a total of $0.2 million on Friday, February 2nd.

What’s more interesting in fact, Phillip Frost has bought $2.6 million worth of stock over the last two weeks according to Form 4 filings with the SEC. That’s roughly 1.5% of the company’s total market capitalization.

Recent Opko Health Insider Transactions
Insider Trading Relationship Date #Shares Value ($)
Phillip Frost CEO & Chairman Feb 02 55,000 $236,680
Phillip Frost CEO & Chairman Jan 31 65,000 $290,416
Phillip Frost CEO & Chairman Jan 26 55,000 $269,712
Phillip Frost CEO & Chairman Jan 25 75,000 $374,204
Phillip Frost CEO & Chairman Jan 24 100,000 $488,829
Phillip Frost CEO & Chairman Jan 23 100,000 $476,070
Phillip Frost CEO & Chairman Jan 22 100,000 $439,675
TOTAL 550,000 $2,575,586

The company’s shares last traded at $4.38 as of Monday, down 50% over the last year and 14% over the last month. While the stock has been hammered of late, could the recent insider transactions signal a promising road ahead for shareholders?

Opko Health Valuation Detail
Analysis Model Fair Value Upside (Downside)
10-yr DCF Revenue Exit $11.31 158.5%
Peer Revenue Multiples $9.48 116.8%
10-yr DCF EBITDA Exit $4.16 -5.0%
5-yr DCF EBITDA Exit $3.05 -30.2%
10-yr DCF Growth Exit $2.83 -35.3%
Earnings Power Value $2.68 -38.8%
Average $5.58 27.6%

Finbox.io applies pre-built valuation models to calculate a fair value for a given stock and uses consensus Wall Street estimates for the forecast when available. The company’s average fair value of $5.58 implies 27.6% upside and is calculated from 6 separate analyses as shown in the table above.

While insider activity on its own is not necessarily a buy or sell signal, it may offer insight into how ownership and management feel about a company’s future prospects. One of the greatest investors of all time, Peter Lynch, was noted as saying that:

insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

However, keep in mind this is only one aspect of stock research and that there are other important items to consider. I recommend you continue to research Opko Health to get a more comprehensive view of the company’s fundamentals by looking at:

Efficiency Metrics: what is Opko Health’s EBITDA margin or asset turnover ratio and how does it compare to its peers.

Projected Growth: what is the company’s projected sales growth or long-term earnings growth rate. Is the company’s growth expected to speed up or slow down?

Risk Metrics: what about Opko Health’s financial leverage or its quick ratio. Does the company have enough liquidity to pay its short-term obligations?

 


Author: Matt Hogan

Expertise: Valuation, financial statement analysis

Matt Hogan is a co-founder of finbox.io. His expertise is in investment decision making. Prior to finbox.io, Matt worked for an investment banking group providing fairness opinions in connection to stock acquisitions. He spent much of his time building valuation models to help clients determine an asset’s fair value. He believes that these same valuation models should be used by all investors before buying or selling a stock.

His work is frequently published at InvestorPlaceBenzingaValueWalkAAIIBarron’sSeeking Alpha and investing.com.

Matt can be reached at matt@finbox.io.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

image source: Investopedia

Expertise: Valuation, financial statement analysis. Matt Hogan is also a co-founder of finbox.io. His expertise is in investment decision making. Prior to finbox.io, Matt worked for an investment banking group providing fairness opinions in connection to stock acquisitions. He spent much of his time building valuation models to help clients determine an asset’s fair value. He believes that these same valuation models should be used by all investors before buying or selling a stock. His work is frequently published at InvestorPlace, Benzinga, ValueWalk, AAII, Barron’s, Seeking Alpha and investing.com. Matt can be reached at matt@finbox.io or at +1 (516) 778-6257.

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