Moderna Faces Persistent Overhang After $6 Million Insider Buy
There have been some interesting insider purchases after the market selloff in the first quarter.
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The market ended mixed on Tuesday to commence trading in the second quarter.
It was at least better market action than investors experienced to close out March on a dismal note. It was the worst quarter for equities in two and a half years with the Nasdaq falling some 10.4% for the quarter, with approximately 80% of the damage being done in March. The S&P 500 was off a more respectable 4.6% for the opening stanza of 2025.
I am sure most of the financial commentary over the next couple of days will be around the bevy of tariffs that will be announced during "Liberation Day." I will probably post a column on that subject next week, once I have had a chance to dig deeper into the details of this evolving new trade policy. A better idea on what retaliatory tariffs these changes will trigger will be more known by then as well.
Today, I want to highlight a couple of names seeing significant new purchases by insiders and beneficial owners during last month’s equity downturn. Maybe they can point the way to some stocks that have been oversold as the market pulled back.
A director and the company’s CEO purchased just over $6 million worth of equity early last month in Moderna MRNA. It marked the first insider buying in this stock in years and the stock is down some 15% since these purchases. The entire biotech sector has sold off hard over the past two trading sessions mainly due to the resignation of the FDA’s top vaccine regulator. I think, for many stocks in the sector, this is a blatant overreaction, but for Moderna it could remain an overhang for some time. It should be noted the stock is down approximately 95% from its peak in the summer of 2021 near the height of the COVID-19 pandemic.
A beneficial owner from Singapore purchased just over $35 million of stock in mid- and late March in retailer Victoria’s Secret VSCO and now owns approximately one-eighth of the outstanding shares in this well-known but challenged retailing entity. There were some brief takeover rumors around the company a few weeks ago. The buyer also might just be doing some bottom fishing, as the stock is down some 55% in 2025 year to date.
The company’s fourth quarter results beat top- and bottom-line expectations in early March. However, results got a favorable impact from a one-time change in an accounting estimate related to gift card redemptions. Even without the adjustment, revenues and profits came in at the high end of expectations, it should be noted. However, what primarily sent the stock down 30% over the past month, aside from legitimate concerns about tariffs, was management’s conservative guidance for FY2025.
Leadership cited near-term macro concerns for putting out a low bar for the new fiscal year. It guided to approximately $6.25 billion in revenues in 2025, some $100 million short of the consensus. I will probably start an initial small stake in this name on the next market pullback. The stock trades for less than seven-times trailing earnings and 25% of revenues. The balance sheet is also in good shape.
At the time of publication, Jensen had no positions in any securities mentioned.
