Clusters of Insider Buying at Retail Energy Services Company and U.S. LNG-Exporter Cheniere Energy, Plus Other Noteworthy Insider Trading

As a general rule, corporate insiders have an edge over other investors when it comes to trading securities because insiders know more about their companies than any outsiders. The stock market regulator in France recently alleged that Ubisoft Montreal’s Chief Executive Officer and four other executives sold shares in the weeks before mid-October of 2013, when the video game publisher announced that Watch Dogs and The Crew would be delayed to 2014. The company’s share price dropped by around 25% on the announcement, so clearly insiders know something outsiders do not.

A great percentage of insider selling represents routine insider selling, triggered by diversification, liquidity reasons, or other reasons unrelated to a company’s current developments or future prospects. However, as shown in the example above, certain insider selling can convey meaningful information for non-insiders. Indeed, corporate insiders have a better understanding of their company’s business and industry environment than most of us, which likely explains their success at trading securities. As the law requires that information be “material” to constitute illegal insider trading, insiders can keep buying and selling securities legally despite having a clear edge over outsiders. Without further ado, let’s proceed to the discussion of a set of noteworthy insider transactions reported with the SEC on Monday.

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Cluster of Insider Buying at Retail Energy Services Company

Several insiders at Spark Energy Inc. (NASDAQ:SPKE) piled up shares during the first day of the week, so let’s have a look at the most voluminous purchases. To start with, W. Keith Maxwell III, Chairman of the company’s Board of Directors, acquired 42,185 shares on Monday at prices ranging from $24.89 to $26.50 per share. Following the recent purchase, Mr. Maxwell currently holds an ownership stake of 135,035 shares. Board member James G. Jones II snapped up 1,000 units of common stock on the same day at prices varying from $25.90 to $27.04 per unit, a purchase that lifted his holding to 12,677 units. Kenneth Michael Hartwick, yet another member of the company’s boardroom, snapped up 1,000 shares on Monday at $26.20 apiece, boosting his stake to 10,777 shares.

The growing independent retail energy services company has seen the value of its shares advance by 25% since the start of the year. In early August, Spark Energy Inc. (NASDAQ:SPKE) completed the purchase of all outstanding membership interests in several retail energy providers that serve electrical customers in Maine, New Hampshire, and Massachusetts and had around 121,000 residential customer equivalents (RCEs) at the time of acquisition. Moreover, the company bought membership interests in several other retail energy providers in late August, all New York limited liability companies that serve natural gas and electricity customers and had 220,000 RCEs at the end of August. Jim Simons’ Renaissance Technologies LLC reported owning 60,600 shares of Spark Energy Inc. (NASDAQ:SPKE) in its 13F for the third quarter.

The next two pages of this article will discuss other insider transactions reported with the SEC on Monday.

Board Member at Studio Known for “The Hunger Games” Buys Shares Amid Share Price Recovery

One member of Lions Gate Entertainment Corp. (USA) (NYSE:LGF)’s keeps buying more shares as the stock has embarked on a recovery path. Board member Gordon Crawford snatched up 40,000 shares on Thursday at prices that fell between $22.79 and $23.19 per share. After the recent purchase, Mr. Crawford currently owns an aggregate of 338,833 shares.

In late October, analysts at Morgan Stanley started coverage on the studio known for “The Hunger Games” with an ‘Overweight’ rating and a price target of $25. As some may already know, Lions Gate Entertainment Corp. (USA) (NYSE:LGF) agreed to acquire premium television network Starz (NASDAQ:STRZA) in late June for a total cash-and-stock consideration of around $4.4 billion, a deal set to diversify the acquirer’s business and make its financial performance less dependent on whether the company releases a hit movie or not. “Post merger, the investment thesis revolves primarily around Starz, which is showing top line strength from new, higher-margin digital distribution platforms,” said Morgan Stanley analysts late in October. The shares of Lions Gate Entertainment are 27% in the red this year. Ken Griffin’s Citadel Advisors LLC was the owner of 4.42 million shares of Lions Gate Entertainment Corp. (USA) (NYSE:LGF) at the end of the September quarter.

Cluster of Insider Buying at the Sole U.S. Exporter of LNG

Three different insiders at Cheniere Energy Inc. (NYSEMKT:LNG) bought shares over the course of the past several days. To start with, Board member Samuel Jay Merksamer, a managing director of Carl Icahn’s Icahn Capital LP, bought 13,500 shares on Monday at a price tag of $35.57 each. After the recent purchase, Mr. Merksamer currently owns 18,634 shares. Sean N. Markowitz, General Counsel and Corporate Secretary since May 2016, acquired a new stake of 1,500 shares on Friday at a price of $36.18 each. Last but certainly not least, President and CEO Jack A. Fusco purchased 7,681 shares on Thursday and 7,685 shares on Friday at prices in the range of $37.40 to $37.50 per share. The 7,685-share block is held through Fusco Energy Investment LLP, which currently owns 130,628 shares. Mr. Fusco also holds a direct ownership stake of 367,009 shares following the purchase.

The shares of the sole U.S. exporter of liquefied natural gas have dropped slightly in the past month or so, partly owing to a decline in crude oil prices. While the LNG-related businesses operated by the Houston-based energy company have little direct exposure to oil, the pricing mechanism for natural gas and LNG are affected by crude oil prices. Cheniere Energy Inc. (NYSEMKT:LNG)’s shares are down 3% this year. John Griffin’s Blue Ridge Capital reported owning 1.47 million shares of Cheniere Energy Inc. (NYSEMKT:LNG) through the latest round of 13Fs.

The final page of this insider trading article discusses several insider sales observed at two other companies.

CEO of Strong Performing Casual-Dining Chain Offloads Shares

The man in charge of Texas Roadhouse Inc. (NASDAQ:TXRH) offloaded a great deal of shares this past week. CEO and Chairman W. Kent Taylor discarded 100,000 shares on Thursday at prices varying from $44.52 to $44.58 per share, cutting his direct ownership stake to 4.13 million shares. Mr. Taylor also holds an indirect ownership stake of 1.10 million shares, which are held via Taylor Family Partners Ltd.

The shares of the casual-dining chain have gained 29% since the start of the year, which does somewhat explain the CEO’s sale. After all, the entire restaurant industry has been struggling as of late partially due to the U.S. presidential campaign, whereas steakhouse chain Texas Roadhouse Inc. (NASDAQ:TXRH) has managed to please investors with solid growth rates in recent quarters. The company’s total revenue for the three months that ended September 27 rose by 10% year-over-year to $481.64 million, while its comparable restaurant sales growth amounted to 3.4% for the quarter. Nonetheless, the 3.4%-figure represents a small step backward as compared to the performance enjoyed in the previous quarters. Ken Griffin’s Citadel Advisors LLC added a 1.11 million-share stake in Texas Roadhouse Inc. (NASDAQ:TXRH) to its equity portfolio during the third quarter.

One Executive at Packaging Company Unloads Shares

One member of WestRock Co (NYSE:WRK)’s executive team also discarded shares last week. James B. Porter III, President of Business Development and Latin America at WestRock, liquidated 39,240 shares last Wednesday and 70,760 shares on Thursday at prices varying from $47.70 to $48.51 per share, all of which were held in a trust fund that currently owns an aggregate of 41,223 shares. Mr. Porter also holds a direct ownership stake of 66,258 shares.

The provider of packaging solutions has seen its market capitalization jump by 8% since the beginning of the year. The aforementioned insider selling comes shortly after WestRock Co (NYSE:WRK) released its financial results for the fourth quarter and fiscal year that ended September 30. During the September quarter, the company achieved $89 million in year-over-year productivity improvements, which yield an annual run rate of $500 million of synergy and performance improvements. The company recorded net sales of $3.61 billion for the previous quarter, down from $3.62 billion posted in the same period of the previous year. Jeffrey Smith’s Starboard Value LP owns exactly 3.00 million shares of WestRock Co (NYSE:WRK) as of the end of the third quarter.

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