Berkshire Hathaway (BRK-B), a major holder of Verisign (VRSN), recently added to that stake with three buys over the past month. The buys came to a total cost of just over $89 million, increasing Berkshire’s stake by 4%.
This cluster of buys marks the first insider buying at Verisign over the past two years. Going further back, company directors and officers have been sellers of shares on a steady basis.
Overall, Verisign insiders own 14.4% of shares.
The internet infrastructure company is up a scant 4% over the past year, far underperforming the overall stock market. That’s about in-line with Verisign’s operational performance, as revenues rose by just 4% and earnings increased by just 7%.
However, with the company renewing a key government contract, shares are likely in a strong position for the year ahead.
Action to take: Verisign shares are starting to tick higher, and just broke to a new 52-week high so momentum investors may like shares near current prices with more upside in the months ahead.
Further buys from Berkshire may also help put a floor under the share price near here, making it easier for the stock to trend higher over time.
Currently, Verisign does not pay a dividend.
For traders, the March $220 calls, last trading for about $3.50, could see low-to-mid double-digit returns on a further push higher in shares in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.