Sonic Corporation (SONC) and PHI Inc. (PHII) Register Some Insider Buying, Plus Three Other Companies with Insider Selling

The dollar volume of both insider buying and selling increased last week relative to the volume recorded for the previous trading week. The ratio of insider buying to selling shows that corporate insiders sold nearly 26 times more stock than they bought this past week, which isn’t necessarily promising for the investment community. However, retail investors closely following insider trading metrics should be aware that directors and executives usually sell much more stock than they buy, thanks to the increased usage of equity-based compensation packages. Insider Monkey processed numerous Form 4 filings submitted with the SEC on Friday and pinpointed two companies with relatively noteworthy insider buying, as well as three companies with notable insider selling.

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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).

One Board Member of This Drive-In Restaurant Chain Bought Shares Last Week 

Sonic Corporation (NASDAQ:SONC) had not seen much insider trading activity on the buy side in the past few years until last week. Board member Kathy L. Taylor purchased 10,000 shares on Wednesday at prices varying from $29.84 to $29.85 per share, all of which are held by a trust fund that currently owns 38,870 shares. Ms. Taylor also holds a direct ownership stake of 1,358 shares.

The shares of the Oklahoma-based quick serve restaurant chain have dropped by 13% in the past month, after the company warned investors that same-store sales for the third quarter of fiscal 2016 that ends March 31 would be lower than previously anticipated. Sonic Corporation (NASDAQ:SONC) anticipates fiscal third-quarter comparable sales to be positive, but below its guidance of 4%-to-6%, citing “slower industry traffic and modestly unfavorable weather during the quarter”. The shares of the drive-in restaurant chain are 5% in the red year-to-date. Richard Chilton’s Chilton Investment Company owns 3.52 million shares of Sonic Corporation (NASDAQ:SONC) as of the end of March.

The next two pages of this insider trading article will discuss several noteworthy insider transactions recorded at four other companies.

The Man in Charge of This Provider of Helicopter Transport Services Snapped Up Shares Last Week

PHI Inc. (NASDAQ:PHII) had its most influential executive purchase two classes of stock last week. Chairman and Chief Executive Officer Alton A. Gonsoulin Jr. snapped up two blocks of 1,000 voting shares each on Wednesday and Thursday at prices that ranged from $15.28 to $15.71 per share, lifting his “voting” stake to 2.05 million shares. Moreover, Mr. Gonsoulin purchased 18,000 and 13,000 units of non-voting common stock on Wednesday and Thursday at prices that fell in the range of $15.27 to $15.75 per share, which boosted his “non-voting” ownership stake to 1.09 million shares.

The provider of helicopter transport services has seen its market value plummet by 19% in the past month, mainly owing to a disappointing first-quarter earnings report. PHI Inc. (NASDAQ:PHII) primarily provides transportation services for major oil and gas production companies, but also offers air medical transportation for hospital and emergency services agencies. The company’s operating revenues for the first quarter of 2016 were $164.0 million, down from $204.2 million recorded a year ago due to weaker performance of the oil and gas segment. Greg Boland’s West Face Capital cut its stake in PHI Inc. (NASDAQ:PHII) by 12% during the March quarter to 3.22 million shares.

This Metal Distributor Witnesses Increased Insider Selling Near 52-Week Highs

Reliance Steel & Aluminum Co (NYSE:RS) registered a mini cluster of insider selling last week. To start with, Douglas M. Hayes, a Director of Reliance since September 1997, discarded 5,000 shares on Wednesday at a price of $73.78 per share, which were held by the Douglas and Connie Hayes Living Trust that currently owns 11,898 shares. Mr. Hayes also holds a direct ownership stake of 4,709 shares. Moreover, Executive Chairman David H. Hannah sold 30,000 shares on the same day at prices that ranged from $73.60 to $74.05 per share, all of which were held by the David H. and Joan B. Hannah Family Trust. After the recent sale, the trust fund continues to own 168,000 shares of Reliance Steel & Aluminum.

The shares of the metals service center company reached a new 52-week high of $75.46 last week, so the recent insider selling should not come as a surprise for the investment community. Reliance Steel & Aluminum Co (NYSE:RS)’s shares are up 27% since the beginning of the year. Meanwhile, the company’s sales for the first quarter of 2016 were $2.16 billion, which decreased from $2.61 billion reported a year ago. Adage Capital Management, founded by Phillip Gross and Robert Atchinson, had 1.91 million shares of Reliance Steel & Aluminum Co (NYSE:RS) in its equity portfolio at the end of the first quarter.

Avista Corp (NYSE:AVA) Had Two Different Insiders Offload Shares This Past Week

To start with, Senior Vice President Karen S. Feltes discarded 25,000 shares on Friday at a sale price of $40 per share, cutting her overall holding to 20,522 shares. Furthermore, Board member Erik J. Anderson sold 5,047 shares on the same day for $40.05 each, which trimmed his ownership to 20,995 shares.

The electric and natural gas utility has seen its market capitalization gain 13% since the beginning of 2016. Avista Corp (NYSE:AVA) posted net income of $56.1 million for the first three months of 2016, up from $46.4 million recorded a year ago. The increase in the company’s bottom-line figure was driven by an increase in gross margin due to general rate increases and colder weather during the quarter as compared to the same period of the prior year. Ken Fisher’s Fisher Asset Management reported owning 751,222 shares of Avista Corp (NYSE:AVA) through the latest round of 13Fs.

Increased Insider Selling at Patrick Industries in the Past Several Weeks and Months

Patrick Industries Inc. (NASDAQ:PATK) has also witnessed noteworthy insider selling in the past few weeks and months, so let’s focus on the most recent activity. Jeffrey M. Rodino, Chief Operating Officer and Executive Vice President of Sales, offloaded 2,500 shares on Wednesday and 7,500 shares on the following day at prices ranging from $53.00 to $53.05 per share, reducing his ownership to 61,647 shares. President Andy L. Nemeth sold 20,000 shares last week at $53.00 apiece, after which he currently owns 72,010 shares.

The shares of the manufacturer of building products and materials to the manufactured housing (MH) and recreational vehicle (RV) industries in the U.S. have advanced 22% since the start of 2016. The impressive performance of Patrick Industries Inc. (NASDAQ:PATK)’s shares reflects sustained growth in the RV market, as well as a strong growth rate in wholesale industry shipments in the MH market. Jeffrey Gendell’s Tontine Asset Management has 1.30 million shares of Patrick Industries Inc. (NASDAQ:PATK) among its holdings.

Disclosure: None