Surging Insider Buying Despite Market Rally, Headlined by Purchases at These 3 Companies

Olin Corporation (NYSE:OLN) has seen intensifying insider buying activity over the past month or so, as three different executives purchased shares last week. To start with, Chairman and Chief Executive Officer Joseph D. Rupp snapped up 70,000 shares on Thursday at a price of $14.26 per share, lifting his direct ownership stake to 543,293 shares. The CEO also holds an indirect ownership stake of 79,123 shares, held under the Olin Common Stock Fund of the Olin Corporation Contributing Employee Ownership Plan (CEOP). Treasurer and Vice President Stephen C. Curley purchased 5,000 shares two days earlier at a cost of $13.38 per unit and currently owns 20,837 shares. Last but not least, Vice President John M. Sampson acquired 5,000 shares on the same day at $13.84 apiece and currently holds a stake of 11,931 shares.

In October 2015, Olin Corporation successfully consummated the acquisition of Dow Chemical Co (NYSE:DOW)’s U.S chlor alkali and vinyl, global chlorinated organics and global epoxy businesses. The freshly-enlarged company anticipates realizing synergies in the range of $40 million to $60 million in 2016, with an annualized run rate of roughly $70 million going into 2017. Reportedly, Olin Corporation’s corporate insiders recently had their phantom stock holdings vest and settle automatically in cash, which partly explains the recent insider buying activity. However, the fact that insiders have been reinvesting some proceeds into their own company’s stock is surely a bullish signal. The shares of the company are down by 45% over the past year, but began to embark on a steady uptrend a few weeks ago. Most importantly, the company has a very cheap valuation relative to its peers, considering that Olin has a forward P/E multiple of only 8.54, while the Specialty Chemicals industry has a ratio of 18.40. Jeffrey Gates’ Gates Capital Management added a 3.18 million-share position in Olin Corporation (NYSE:OLN) to its portfolio during the fourth quarter.

Jones Lang LaSalle Inc. (NYSE:JLL) had not seen any Directors or Executives buy shares since early 2011, until this month. President and Chief Executive Officer Colin Dyer bought 5,000 shares on Wednesday at a weighted average cost of $103.13 and currently owns 49,425 shares. Moreover, Christian Ulbrich, Chief Executive Officer of Europe, Middle East & Africa (EMEA), purchased a 1,000-share block on February 12 for $97.75 each to increase his stake to 26,394 shares.

The commercial real estate services company has seen its shares decline by 34% since the beginning of 2016, presumably because of worries about the state of the commercial real estate market. The recent selloff in commercial mortgage-backed securities (CMBS), which is the longest on record, indicates that the sentiment in the commercial property market is not overly optimistic. The recent widening in CMBS spreads is mainly attributable to the tightening monetary policy pursued by the Fed, although it has been ongoing since last summer. Just recently, Jones Lang LaSalle reported 2015 revenue of $5.97 billion, which was up from $5.43 billion reported for 2014. Meanwhile, the company’s adjusted earnings per share increased to $10.01 from $8.65. It is also important to note that the stock trades at a forward P/E multiple of 9.35, which is below the average of 15.75 for the companies included in the S&P 500 Index. Ken Heebner’s Capital Growth Management reported owning 680,000 shares of Jones Lang LaSalle Inc. (NYSE:JLL) through the latest round of 13F filings.

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