These 3 Companies’ Insiders Pile Up More Shares Amid Increased Volatility

The depressed crude oil prices and fresh worries about China’s decelerating economy have put significant weight on U.S. equities in the first trading sessions of 2016. The Dow Jones Industrial Average dropped 252.15 points on Wednesday, extending its downtrend that kicked off in late December. The Chicago Board Options Exchange Volatility Index, simply known as the VIX, has jumped above 20, which suggests that there is a lot of uncertainty and concern in the stock market at the moment. Even so, certain insiders ignored the increased volatility in equity markets, and started piling up more shares of their companies. Of course, this type of activity amid increased concerns about the direction of U.S. equities should be paid double attention, as it suggests insiders’ confidence in their companies’ future prospects despite a global economic slowdown and low crude oil prices. The team of analysts at Insider Monkey pinned down three companies that reported noteworthy insider buying lately, so this article merely focuses on discussing the insider trading behavior witnessed at those companies and their recent performance.

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Let’s start off by analyzing the insider trading activity reported at Devon Energy Corp (NYSE:DVN). Director Barbara M. Baumann purchased 8,200 shares on Wednesday at a weighted average price of $30.44, lifting her overall holding to 21,320 shares. This independent energy company that mainly engages in the exploration, development and production of oil, natural gas and NGLs has seen its shares drop 49% over the past year and may keep going down in the near-term. The depressed crude oil prices and NGL prices have greatly impacted the company’s financial performance throughout 2015. Devon Energy Corp (NYSE:DVN) reported a net loss of $9.92 billion for the nine months ended September 30, as compared to net earnings of $2.02 billion posted for the same period a year earlier. Roughly half of the company’s oil and gas production in 2015 was hedged at $90 per barrel and $4 per Mcf, correspondingly. Those hedging contracts generated $1.7 billion of cash flow in the first nine months of last year. However, the sustained decline in crude oil prices and the expiration of a significant portion of Devon’s hedges in the fourth quarter of 2015 will most likely put even more downward pressure on the company’s financials. The number of hedge funds from our database with positions in the company dropped to 48 from 56 during the third quarter. Israel Englander’s Millennium Management reported owning 5.85 million shares of Devon Energy Corp (NYSE:DVN) through its 13F filing for the third quarter.

The second page of this insider trading article discusses the insider buys reported at Bob Evans Farms Inc. (NASDAQ:BOBE) and Liberty Tax Inc. (NASDAQ:TAX).

Bob Evans Farms Inc. (NASDAQ:BOBE) has seen two insiders make purchases so far this week. Director Douglas N. Benham snapped up 2,000 shares on Monday at a price of $38.27 per share and currently owns 31,057 shares. Director Kevin M. Sheehan bought 5,000 shares on the same day for $38.03 each, boosting his total stake to 9,557 shares. The shares of the owner and operator of full-service restaurants are down nearly 30% over the past one-year period and trade at a reasonable forward price-to-earnings ratio of 17.96, which compares with the average of 17.44 for the S&P 500. In late December, the company announced the sale of its 145 restaurant properties for $200 million, which are leased back for 20 years with up to five successive five-year renewal options. Bob Evans Farms is attempting to monetize its real estate assets, while the net proceeds from this transaction are planned to be used for paying down debt and repurchasing shares. In early December, activist Tom Sandell of Sandell Asset Management urged the company’s Board of Directors to separate its packaged food business from its restaurant chain; a move that would enable the freshly-assigned CEO, Saed Mohseni, to inject new dynamism into the restaurant business without being distracted by the packaged goods business. Rob Citrone’s Discovery Capital Management trimmed its position in Bob Evans Farms Inc. (NASDAQ:BOBE) by 3% during the July-to-September period to 1.85 million shares.

Liberty Tax Inc. (NASDAQ:TAX) also witnessed an unusual volume of insider buying in the past week or so. Director Robert M. Howard purchased 7,953 shares on Monday and 12,047 shares last week at prices that ranged from $23.21 to $23.84 per share. After the recent purchases, the Director owns 22,000 shares. The shares of this provider of tax preparation services in the U.S. and Canada are down by 38% over the past year, after suffering two significant pullbacks in the first half of 2015. The company’s tax preparation services and other related tax settlement products are offered mainly via franchised locations, but it also operates a number of company-owned offices each tax season. Liberty Tax reported total revenue of $15.39 million for the six-month period that ended October 31, down from $15.57 million reported a year ago. This decrease was mainly attributable to a drop in franchise fees due to lower cash collections and a reduction in AD fees. Analysts anticipate the company to post earnings per share of $1.81 for fiscal 2016, which yields a forward P/E ratio of 12.11. Hence, the company may have a strong year in terms of both financial and stock performance should analysts’ earnings estimates materialize. Royce & Associates, founded by Chuck Royce, trimmed its stake in Liberty Tax Inc. (NASDAQ:TAX) by 27% during the September quarter to 798,228 shares.

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