3 Struggling Companies Witnessing Heavy Insider Buying Activity

Let’s now turn our full attention to the notable insider purchase registered at Plains GP Holdings LP (NYSE:PAGP). Greg L. Armstrong, Chairman of the Board and Chief Executive Officer, purchased a 100,000-share block on Thursday at prices ranging from $10.90-to-$11.27. The CEO currently holds an ownership stake of exactly 200,000 shares. Plains GP Holdings owns and operates midstream energy infrastructure and offers logistics services for crude oil, natural gas liquids, natural gas and redefined products via its interest in master limited partnership Plains All American Pipeline LP. Although the company does not have significant direct exposure to petroleum prices, Plains GP’s performance is indirectly affected by the low oil-price environment, which affects production levels on the North American continent. The slump in crude oil prices that started during the second half of 2014 caused many producers to cut back on capital spending, which has significantly impacted Plains GP’s operations and performance thus far. The stock is 58% in the red year-to-date, so the CEO’s purchase might point to his confidence in the long-term prospects of the company. The number of hedge funds invested in the company climbed to 27 from 23 during the September quarter, with them accumulating 7.10% of its outstanding common stock in aggregate. Daniel S. Och’s OZ Management holds a 9.25 million-share position in Plains GP Holdings LP (NYSE:PAGP) as of September 30.

Lastly, we will examine the insider buying activity at MAXIMUS Inc. (NYSE:MMS), which has seen two insiders buy shares so far this month. Director Peter B. Pond snapped up a new stake of 14,375 shares on Wednesday at a weighted average price of $52.27. The Director also holds restricted stock units amounting to an additional 235,698 shares of common stock. Earlier this month, Chief Financial Executive Richard John Nadeau bought 1,000 shares at prices in the range of $53.10-to-$53.23, enlarging his stake to 6,889 shares. The provider of business process services (BPS) to government health and human services agencies had experienced a great year in terms of stock performance until the company released its fourth quarter and full fiscal year 2015 financial results on November 12, which sent the stock plummeting by over 21%. MAXIMUS’ fourth quarter revenue grew by 33% year-over-year to $578.7 million, while its GAAP diluted earnings per share remained flat at $0.53. However, the company slashed its GAAP EPS guidance for fiscal year 2016 to the range of $2.40-to-$2.70, from a range of $2.85-to-$3.05, citing “slower ramp and hence a reduced contribution from the U.K. Health Assessment Advisory Service contract”. Ten hedge funds monitored by our team had the stock in their portfolios at the end of the third quarter, compared to nine registered in the prior one. Jim Simons’ Renaissance Technologies owned 1.35 million shares in MAXIMUS Inc. (NYSE:MMS) on September 30.

Disclosure: None