Cluster of Insider Selling at High-Yield REIT and Other Noteworthy Insider Trading

Current research and studies conducted in the not-so-distant past conclude that investors could build profitable portfolios based on a strategy that mimics specific insider trading activity. Corporate insiders have a great deal of information at their disposal and investors should take notice of how insiders trade their company’s stock. True, insiders know a lot more about what is going on at their companies than any of us or any other professional money managers.

By buying shares when corporate insiders do, investors can earn significantly higher returns than they would earn by simply investing in a stock market index. Nonetheless, insider trading pundits recommend following clusters of insider buying, which are believed to be much more informative than single buys. However, the strategy of blindly mimicking each insider purchase or cluster of buying does not guarantee success. It isn’t hard to find securities in which corporate insiders made buys at significantly higher prices than current ones, so investors should not solely base their judgment on insider trading metrics. Having this in mind, let’s turn our focus to a set of noteworthy insider transactions reported with the SEC on Monday.

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Board Member at Large Electric Power Company Buys Shares

To begin with, one member of NextEra Energy Inc. (NYSE:NEE)’s boardroom purchased some shares at the end of the previous week. William H. Swanson, appointed to the company’s Board of Directors in mid-October 2009, snatched up 3,860 shares on Friday at a price tag of $128.86 apiece. Mr. Swanson currently owns an aggregate of 25,180 shares following the Friday purchase.

The shares of the large electric power company, which operates the largest generator of renewable energy from the wind and sun in the world, have gained 15% in the past 12 moths. According to fresh media reports, NextEra Energy Inc. (NYSE:NEE)’s planned acquisition of 100% of the equity of reorganized Energy Future Holdings Corp moved a step closer to completion when a judge said he would confirm the acquiree’s bankruptcy-exit plan. Dallas-based Energy Future has an indirect ownership of around 80% in Oncor Electric Delivery Company LLC, one of the country’s largest electricity transmission businesses. NextEra Energy entered into additional agreements in late October 2016, which would result in NextEra being the sole owner of Oncor. Adage Capital Management, founded by Phill Gross and Robert Atchinson, reported ownership of 2.37 million shares of NextEra Energy Inc. (NYSE:NEE) in its 13F filing for the fourth quarter.

Let’s head to the next page of this insider trading article, where we discuss more insider buying observed at other companies.

Board Member of Alabama Banking Firm Buys Shares Despite Massive Stock Price Appreciation

A member of ServisFirst Bancshares Inc. (NASDAQ:SFBS)’s Board of Directors has been hungrily piling up shares over the past several days. Michael D. Fuller, who has served as a director of ServisFirst Bancshares since 2007, purchased 11,000 shares on Friday, 1,550 shares on Thursday, 9,590 shares on Wednesday and 5,000 shares on Tuesday at prices ranging from $41.80 to $42.06 per share. Following this series of transactions, Mr. Fuller currently owns 401,466 shares.

The bank holding company of Alabama banking corporation ServisFirst Bank has seen its market capitalization rise by a staggering 131% in the past year, so the series of transactions discussed above come as a surprise. The insider purchases come several weeks after ServisFirst Bancshares Inc. (NASDAQ:SFBS) reported a year of record growth in net income, loans and deposits. Although in the middle of December the bank’s management thought the fourth quarter was going to be the worst quarter for loan growth ever, the firm ended up having a record month. The bank booked $220 million of loans in the month of December, booked mostly in the last two weeks of the month. ServisFirst had $280 million in loan growth for the quarter. The number of hedge funds from our system invested in the bank holding company rose to ten from six during the December quarter. Cliff Asness’ AQR Capital Management had around 117,000 shares of ServisFirst Bancshares Inc. (NASDAQ:SFBS) in its portfolio at year-end.

Director at Independent Exploration and Production Company Purchases Shares

Oasis Petroleum Inc. (NYSE:OAS)’s shareholders had not seen any corporate insiders buy shares since early March 2015 until last week. Board member John E. Hagale snapped up 15,000 shares on Friday at prices that fell between $13.99 and $14.08 per share, a purchase that boosted his ownership to 44,100 shares.

The shares of the independent exploration and production company are up 166% in the past 12 months, with the purchase mentioned above serving a very positive indicator unless the director purchased the shares to meet the company’s stock ownership guidelines. Oasis Petroleum Inc. (NYSE:OAS), which focuses on the acquisition and development of unconventional oil and natural gas reserves in the North Dakota and Montana regions of the Williston Basin, recorded net cash provided by operating activities of $104.6 million for the fourth quarter, up from a mere $32.0 million generated during the September quarter. The massive jump reflects the company’s efforts in driving down well costs and operating expenses. Oasis Petroleum plans to bring on two additional rigs in the middle of the year and an additional one in early 2018. John Griffin’s Blue Ridge Capital upped its position in Oasis Petroleum Inc. (NYSE:OAS) by 51% during the December quarter to 6.87 million shares.

The final page of this article discusses fresh insider selling observed at two other companies.

Cluster of Insider Selling at Safe REIT Offering Nearly 4% Dividend Yield

A cluster of high-ranked executives at National Retail Properties Inc. (NYSE:NNN) trimmed their equity stakes this past week. To start with, Chief Executive Officer and Chairman Craig Macnab, who will retire as CEO and step down as Chairman effective April 28 this year, sold 54,183 shares on Friday at a price of $45.03 per share, cutting his overall holding to 422,333 shares. Chief Investment Officer Paul E. Bayer discarded 7,325 shares last Wednesday at $44.80 apiece, a purchase that trimmed his ownership to 184,053 shares. Last but not least, President and Chief Operating Officer Julian E. Whitehurst, who will assume the role of CEO as of April 28, offloaded 17,761 shares last Tuesday for $44.32 each. Mr. Whitehurst owns 286,586 shares after the Tuesday sale.

The shares of the real estate investment trust that acquires, owns and invests in properties leased mainly to retail tenants such as Target and Wal-Mart under long-term net leases are 4% in the green so far in 2017. As tenants sign leases with long initial terms, National Retail Properties Inc. (NYSE:NNN)’s risks associated with turnover and vacancy risk are minimized. Additionally, the so-called “net lease” structure implies that tenants are paying for variable expenses such as property taxes, building maintenance and insurance, which makes a potential investment in the REIT even more attractive. In mid-October, the REIT’s boardroom approved a quarterly dividend of $0.455 per share, which yields $3.95% annually. The dividend yield seems quite attractive, as National Retail Properties is seen as one of the safest and most durable REITs in the world. Ken Fisher’s Fisher Asset Management was the equity holder of 823,000 shares of National Retail Properties Inc. (NYSE:NNN) at the end of December.

Retired CEO of Multi-Bank Holding Company Offloads Shares

One member of Glacier Bancorp Inc. (NASDAQ:GBCI)’s boardroom unloaded a great deal of shares at the end of the previous week. Director Michael J. Blodnick, who retired as President and CEO of Glacier Bank at the end of 2016, sold 73,648 shares on Friday at prices between $36.58 and $37.03 per share, cutting his direct ownership stake to 27,576 shares. Mr. Blodnick also reported the sale of 26,802 shares at a price of $36.62 per share, a block of shares held by his wife.

The regional multi-bank holding company has seen the value of its shares advance by 57% in the past 12 months. Glacier Bancorp Inc. (NASDAQ:GBCI) provides banking services to individuals and businesses in Montana, Idaho, Wyoming, Colorado, Utah and Washington through its wholly-owned bank subsidiary Glacier Bank. Ralph Bassett, who helps manage Aberdeen Asset Management’s Aberdeen U.S. Small Cap Equity Fund, named Glacier Bancorp as one of the favorite stocks held by the fund in a recent interview. “We like that they are in a fairly remote geographic and therefore have little competition,” said Mr. Bassett. He also added that the firm has “done a very good job acquiring local banks that they roll into their cost structure.” Jim Simons’ Renaissance Technologies owned 848,300 shares of Glacier Bancorp Inc. (NASDAQ:GBCI) at the end of the fourth quarter.

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