Founder of Battered Rent-to-Own Company Buys Shares After Activist Criticism, Plus Other Noteworthy Insider Trading

Founder of Battered Rent-to-Own Company Buys Shares After Being Criticized by Activist Hedge Fund

Undoubtedly the most well-informed executive at Rent-A-Center Inc. (NASDAQ:RCII) snapped up some shares this past week. RAC’s founder Mark E. Speese, who took over the CEO role again on an interim basis earlier this year, bought 76,000 shares on Thursday and 24,000 shares on Friday at a weighted average price of $8.44 per share, with all these shares being held via a partnership. Mr. Speese also holds a direct ownership stake of 744,627 shares.

The insider purchase comes after Glenn W. Welling’s Engaged Capital LLC sent a letter to the company’s Board of Directors in mid-February, criticizing the boardroom as being largely “asleep at the wheel” as operating performance has been deteriorating over the past several years. The activist shareholder was concerned that the founder’s history and personal interest in the furniture and electronics rent-to-own company “may bias him against the careful evaluation of all strategic options” available to the company. In fact, Engaged Capital LLC, which has a 12.9% economic interest in Rent-A-Center Inc. (NASDAQ:RCII) through a combination of shares and swaps, asserted that the most logical step for the company going forward would be to sell the entire company. “There is no shortcut to returning to growth given the nature of this business,” said the hedge fund in the letter. Rent-A-Center, considered the nation’s largest rent-to-own company, has seen its market cap drop by 34% in the past year. Royce & Associates LP, founded by Chuck Royce, held around 443,000 shares of Rent-A-Center Inc. (NASDAQ:RCII) at the end of December.

Board Member at IES Holdings Snaps Up Shares

According to our insider trading data, IES Holdings Inc. (NASDAQ:IESC) hadn’t observed any insider buying since late September 2015 until last week. Todd M. Cleveland, who was appointed as a director at the beginning of the month, purchased 5,000 shares on Wednesday and 4,650 shares on Thursdays at prices between $19.70 to $20.50 per share. Mr. Cleveland owns a total of 137,150 shares after these transactions.

IES Holdings Inc. (NASDAQ:IESC) operates as a holding company that owns and manages various operating subsidiaries comprised of providers of industrial infrastructure services to various end markets. The company recently reported revenues of $192.18 million for the first quarter of fiscal 2017 that ended December 31, up $41.4 million year-over-year. Four business combinations completed during fiscal 2016 added $12.5 million to the top-line figure for the three months that ended December. IES Holdings has enjoyed an increase in backlog over the past 12 months, which has started to materialize into revenue. The shares of IES Holdings have gained 59% in the past year. Royce & Associates LP owned 962,000 shares of IES Holdings Inc. (NASDAQ:IESC) at year-end.

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