Noteworthy Insider Buying and Selling Transactions Witnessed at These Five Companies

What is insider trading and why should investors keep track of insider trading behavior? In simple words, insider trading involves the buying or selling of equity securities by individuals who hold access to material, non-public information. Insider trading can be both legal and illegal, but this distinction is not overly important for non-insiders tracking insider trading activity. Corporate insiders such as directors and executives do have a better understanding about their companies’ business operations and future prospects than any of us, so their transactions may serve as great tips for outsiders. It seems that there is just one reason insiders purchase shares in their own companies on the open market, which is that they believe those shares are severely undervalued. On the other hand, insiders can sell shares for any number of reasons, which is why investors pay much more attention to insider buying than selling. With that in mind, let’s proceed to the discussion of the noteworthy insider trading activity registered at five companies, of which three witnessed interesting insider buying.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

Battered Oil Services Company Had Two Board Members Buy Shares This Week

To start with, Weatherford International Plc (NYSE:WFT)’s Director Robert A. Rayne purchased 100,000 shares on Monday at a price of $5.59 per share, boosting his overall holding to 657,645 shares. Francis S. Kalman, another member on Weatherford’s Board, snapped up 30,000 shares on the same day for $5.29 each. After the recent purchase, Mr. Kalman currently owns 70,056 shares.

The provider of equipment and services to the oil and natural gas E&P industry has seen its market value plummet by 31% in the past five trading sessions, as the company reported a wider-than-expected loss and weak guidance for the rest of 2016. The world’s fourth-largest oil services firm reduced its 2016 free-cash-flow guidance by $200 million to a range of $400 million-to-$500 million. Weatherford International Plc (NYSE:WFT) plans to generate free cash flow in the range of $600 million to $750 million each year by 2020, which would yield as much as $3 billion on aggregate. The free cash flow is set to be used to reduce the company’s heavy debt load. Weatherford shares are down 62% in the past 12 months. Sander Gerber’s Hudson Bay Capital Management cut its stake in Weatherford International Plc (NYSE:WFT) by 43% during the March quarter to 216,409 shares.

Let’s head to the next two pages of this article, where we will discuss several noteworthy insider transactions witnessed at four other companies.

This Leading U.S. Publisher Saw One Influential Executive Buy Big This Week

New Media Investment Group Inc. (NYSE:NEWM)’s Chief Financial Officer and Accounting Officer, Gregory W. Freiberg, purchased 25,000 shares on Tuesday at prices varying from $16.00 to $16.10 per share, which boosted his ownership to 73,269 shares. New Media owns, operates and invests in local media assets, with its portfolio of products including 620 publications, 521 websites, 460 mobile sites and six yellow page directories.

Earlier this month, New Media Investment Group Inc. (NYSE:NEWM) completed the $18 million-acquisition of Journal Multimedia, a multi-title publisher of business journals, trade and consumer magazines, digital products, and a research and events division. The acquirer’s total revenue for the first quarter of fiscal 2016 that ended March 27 increased to $300.1 million from $250.6 million, thanks to a series of acquisitions. However, the company’s same-store revenue for the quarter decreased 5.1% year-on-year due to lower advertising revenue and lower commercial printing and other revenue. New Media shares are 17% in the red year-to-date. Murray Stahl’s Horizon Asset Management owns 65,091 shares of New Media Investment Group Inc. (NYSE:NEWM) as of March 31.

Mattersight Had One Board Member Purchase Sizable Block of Shares This Week

Michael J. Murray, member of Mattersight Corp (NASDAQ:MATR)’s Board of Directors, purchased 100,000 shares on Monday at prices that fell between $3.30 and $3.48 per share. Following the recent purchase, Mr. Murray holds a stake of 563,553 shares.

The massive insider purchase comes shortly after the personality-based software provider released its first-quarter earnings report on May 4. Mattersight Corp (NASDAQ:MATR)’s shares have plummeted 43% since the start of 2016, with the earnings report having made matters even worse. The company’s total revenue for the first quarter increased 8% year-on-year to $10.1 million due to increased subscription fees related to several new Behavioral Analytics subscription customers and higher user counts in its existing client base. Mattersight’s top five clients derived 71% of total revenue in the first quarter, so the company’s top-line growth could suffer enormously should one top client find Mattersight’s stack of innovative applications obsolete. Phil Frohlich’s Prescott Group Capital Management had 1.55 million shares of Mattersight Corp (NASDAQ:MATR) in its portfolio at the end of March.

This Global Media and Entertainment Company Saw its CEO Sell Big This Week

Twenty-First Century Fox Inc. (NASDAQ:FOX)’s Chief Executive Officer, James Rupert Murdoch, discarded 152,233 Class A shares on Monday at prices ranging from $29.28 to $29.48 per share. After the recent sizable sell-off, James Murdoch, who took over the reins of the company last year after his father, media mogul Rupert Murdoch, stepped down as CEO, currently owns 160,700 shares.

The shares of the owner of the Twentieth Century Fox studio and cable channels such as Fox News have advanced 10% since the beginning of 2016. Twenty-First Century Fox Inc. (NASDAQ:FOX)’s total revenues for the nine months that ended March 31 were $20.68 billion, down from $22.78 billion recorded for the same period of the prior year. However, the decrease mainly reflects the sale of the company’s DBS businesses in November 2014, which involved the sale of Sky Italia and a 57% interest in Sky Deutschland. David Harding’s Winton Capital Management was the owner of 1.99 million shares of Twenty-First Century Fox Inc. (NASDAQ:FOX) at the end of March.

This Global Fuel Logistics Company Had CEO Offload Shares Last Week

World Fuel Services Corp (NYSE:INT)’s Chairman, Chief Executive Officer and President, Michael J. Kasbar, sold 31,073 shares on Friday at prices varying from $46.28 to $46.60 per share, cutting his overall holding to 858,031 shares. Moreover, Director Richard A. Kassar offloaded 2,500 shares last Monday for $46.82 each, which trimmed his stake to 35,807 shares.

World Fuel Services operates as a global fuel logistics, transaction management and payment processing company, which primarily engages in the distribution of fuel and other related products in the aviation, marine and land transportation industries. Although World Fuel Services Corp (NYSE:INT) has not been entirely immune to plunging crude oil prices, as the company’s first-quarter revenue dropped $2.1 billion year-on-year to $5.2 billion, its bottom-line results haven’t suffered too much of a blow. The logistics company’s net income for the first quarter of 2016 was $52.4 million, down $3.2 million relative to the same quarter of 2015. The shares of the company are up 19% year-to-date. Joe Dimenna’s Zweig DiMenna Partners acquired a new stake of 4,900 shares of World Fuel Services Corp (NYSE:INT) during the January-to-March period.

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