Insider Buying Witnessed at 2 Propane Distributors and a Packaging Company

Last week’s insider buying activity increased significantly relative to the previous week, mainly as a result of Carl Icahn’s bullish moves on Hertz Global Holdings Inc. (NYSE:HTZ) and Cheniere Energy Inc. (NYSEMKT:LNG). At the same time, the volume of insider selling registered last week dropped significantly relative to prior one. Therefore, the ratio of insider selling over insider buying reached a level not seen for a long time, with insiders selling roughly 1.29-times more shares in terms of value than they bought. This ratio should not surprise anyone considering that the S&P 500 Index registered its largest weekly loss since August. But why would anyone bother to monitor the insider trading behavior? As a general rule, insider buying is considered a bullish sign, as it is hard to believe that an insider would invest his or her hard-earned money in a company’s stock without expecting a return. Corporate insiders appear to have a better understanding of their companies’ businesses and future potential, but that does not necessarily mean that insiders’ moves are profitable on all occasions. With that in mind, this article will uncover the insider buying activity registered at three companies and discuss the recent performance of the companies in question.

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To start with, Ferrellgas Partners L.P. (NYSE:FGP) saw three different insiders buy stock last week. Chief Financial Officer Alan C. Heitmann reported purchasing 5,960 shares on Friday at $15.80 apiece, lifting his overall stake to 15,960 shares. Moreover, President and Chief Executive Officer Stephen L. Wambold added 20,000 shares to his holding on the same day, which is currently comprised of 150,000 shares. The 20,000-share block was purchased for $15.78 each. Last but not least, Director Michael F. Morrissey bought 2,000 shares last week at a cost of $15.29 per share and holds 6,000 shares.

The distributor of propane and related equipment has seen its shares decline by 32% this year, including 28% so far in December. The demand for propane is highly dependent on weather conditions, so the warmer-than-expected weather during the three-month period that ended October 31 significantly impacted Ferrellgas Partners L.P. (NYSE:FGP)’s financial results for the first quarter of fiscal year 2016. Nevertheless, the company’s total revenue for the most recent fiscal quarter increased by 6% year-over-year to $471.15 million, thanks to the additional revenue from the midstream operations in the crude oil logistics segment, as a result of the acquisition of Bridger Logistics in June. It is also worth pointing out that the substantial decrease in the wholesale market price of propane led to a stronger gross margin per gallon for the company. A mere four hedge funds tracked by Insider Monkey were invested in the company at the end of the third quarter. Jim Simons’ Renaissance Technologies is one of them, holding 294,600 Ferrellgas Partners L.P. (NYSE:FGP) shares as of September 30.

Let’s move on to the second page of this daily insider trading article, where the insider purchases registered at Sealed Air Corp (NYSE:SEE) and AmeriGas Partners L.P. (NYSE:APU) are discussed.

Sealed Air Corp (NYSE:SEE) was another company that witnessed a high volume of insider trading activity on the buy side last week. Director Kenneth P. Manning bought 4,000 shares on Thursday at a weighted average price of $43.61 and currently holds 130,074 shares. The shares of the manufacturer of protective and specialty packaging for food and consumer goods are up by nearly 1% year-to-date and are trading at an appealing forward price-to-earnings ratio of 16.58, which is slightly below the average of 17.35 for the companies included in the S&P 500. Nearly 42% of the company’s net sales for the nine-month period that ended September 30 were generated in North America, while almost 10% were generated in Latin America. The political and economic conditions in Brazil and Venezuela, currency headwinds and global economic uncertainties have put significant weight on the company’s financial performance this year. Nonetheless, Sealed Air Corporation anticipates net sales of roughly $7.0 billion for 2015, including the impact of foreign currency translations. At the same time, the company raised its adjusted earnings per share guidance for the year to $2.32 from its previous guidance of $2.24-to-$2.28. Andreas Halvorsen’s Viking Global holds an 8.58 million-share position in Sealed Air Corp (NYSE:SEE) as of the end of the third quarter.

AmeriGas Partners L.P. (NYSE:APU) had not witnessed any insider buying activity for more than a year until last week. Vice Chairman John L. Walsh snapped up 3,000 shares on Wednesday and 2,000 shares on Thursday at prices in the range of $34.58-to-$35.82 per share, upping his stake to 12,000 shares. The largest retail propane distributor in the United States has seen its shares drop by 31% thus far in 2015. Approximately 67% of the company’s retail sales are generated during the peak heating season from October through March. Its adjusted net income for fiscal year 2015 totaled $258.6 million, down from $299.3 million reported for fiscal year 2014. This decrease was mainly attributable to the impact of the warmer-than-normal heating season last year. However, the depressed retail volumes were somewhat offset by higher average retail unit margin, which reflected the lower propane prices during fiscal year 2015. It should be mentioned that the shares of AmeriGas Partners are currently trading at very appealing trailing and forward P/E ratios, which might justify the aforementioned insider purchases. The company has a trailing P/E of 16.85, which is below the average of 22.73 for the S&P 500, and a forward P/E ratio of 11.67. Matthew Hulsizer’s Peak6 Capital Management reported owning 46,910 shares of AmeriGas Partners L.P. (NYSE:APU) through the latest round of 13Fs.

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