Hardly a day goes by before I see an alert for yet another insider purchase at Opko Health (OPK) by its Chairman and CEO Dr. Phillip Frost. After months of reporting on these purchases, we decided to do a deep dive to understand the company and Dr. Frost’s motivations for buying the stock as best as possible. With less than a week to work on this article and the fact that Opko is a holding company for various pharma, diagnostics and biotech companies, this could be considered a preliminary report instead of a comprehensive research piece.
It is often said that insiders sell their company stock for a variety of reasons (to diversify, pay for a large expense, etc.) but they buy only because they are bullish about the prospects of their company. This is not entirely true. We have noticed insider buying that appears to be little more than window dressing to “paint the tape” and at times insiders fail to see the big picture that other investors are more in tune with. These insider purchases at Opko certainly feel more like the “paint the tape” variety.