Looking into insider transactions is a crucial component of our investment strategy. Using our stock screener, I came across several important insider purchases that took place since the beginning of 2015. In this article, I would like to look into a couple of them, which involve the following small-cap companies: Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) and Biglari Holdings Inc (NYSE:BH).
I’ll start with the biggest company involved: Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), a $3.6 billion market cap provider of marketing services that offers diverse advertising opportunities through billboards, street furniture displays, transit displays and other out-of-home advertising displays.
Between October 15, 2014, and January 2, 2014, the company’s stock gained more than 72%, reaching a six-year high of $11.25. However, after peaking, the stock fell to $9.60 on January 5, and has not yet recuperated from the fall, as it now trades around $10.05.
Amidst the low prices environment, on February 7, Iheartmedia, Inc., one of the major direct owners of the company, filed a Form 4 with the SEC disclosing the purchase of 2 million shares of Class A Common Stock. The insider declared having paid $10.20 per share, in a transaction that totaled $20.4 million. Iheartmedia now owns 8.55 million shares of Clear Channel Outdoor Holdings, Inc. (NYSE:CCO), more than any institutional or mutual fund shareholder of record.
Also betting on the advertising company is Mario Gabelli’s GAMCO Investors, which roughly doubled its stake in early-October 2014, to 4.8 million shares. There is, however, one hedge fund with an even larger bet on Clear Channel Outdoor Holdings, Inc. (NYSE:CCO): Joshua Friedman And Mitchell Julis’ Canyon Capital Advisors. In its latest 13F filing (for the third quarter of 2014), the fund disclosed ownership of 6.51 million shares, worth more than $43 million at the time, and over $65 million at current stock prices.
Another company I would like to look into is Biglari Holdings Inc (NYSE:BH), an $845 million market cap holding company engaged in several business activities, including franchising and operating of restaurants and other diverse business activities, like media, property and casualty insurance. Its Restaurant Operations’ activities are conducted through two restaurant concepts, Steak n Shake and Western Sizzlin.
Since the beginning of 2015, through seven separate transactions, the company’s Chairman and CEO (also large shareholder), Sardar Biglari acquired 16,215 shares of Common Stock, for a total of approximately $6.5 million. Mr. Biglari paid an average weighted price of $405.70 per share, and now owns 336,636 shares, indirectly, through The Lion Fund, L.P., and another 31,019 shares, directly.
Mr. Biglari has been continuously increasing his exposure to Biglari Holdings Inc (NYSE:BH) for several years now, so, this round of purchases does not seem to respond to any particular news.
However, Mr. Biglari’s dominance is not uncontended. According to IBJ’s Greg Andrews, “Groveland Capital LLC, a Minneapolis-based investment firm, has filed notice with regulators that it will seek to replace Biglari and Biglari Holdings Inc.’s other five directors with its own slate of nominees at the company’s annual meeting in April.”
Once again, GAMCO Investors is amongst the largest institutional investors betting on Biglari Holdings Inc (NYSE:BH). After boosting its wage by 19% over the third quarter, the funds associated to Mr. Gabelli last declared holding (as of September 30, 2014) 117,943 shares of the company, worth about $40 million at the time of the filing. Also bullish on the company is Robert Jaffe’s Force Capital, which also increased its participation in the business by 22% over the third quarter, last disclosing ownership of 8,590 shares, worth almost $3 million.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
