All major U.S. stock indexes recorded their third straight week of gains, recovering after the United Kingdom voted to leave the European Union. The Dow Jones Industrial Average hit another record close on Friday, gaining 2% for the week. Strong U.S. economic data and increasing expectations that central banks would stick to their stimulatory monetary policies for longer pushed U.S. equities to new all-time highs.
Moving on to the main topic of this article, last week’s dollar volume of insider buying accounted for a mere 14% of the dollar volume registered in the previous week. As U.S. equities were heading to new all-time highs and the second-quarter earnings season kicked off with the release of Alcoa Inc. (NYSE:AA)’s earnings report, insiders were somewhat reluctant to buy shares in their own companies. Meanwhile, last week’s volume of insider selling increased week-over-week, so the ratio of insider selling over buying increased massively as compared to the ratio registered for the previous week. In fact, last week’s insider selling-to-buying ratio stood at 90.7-to-1, implying that insiders sold almost $91 worth of shares for each $1 worth of shares bought. Having this in mind, let’s have a look at several noteworthy insider transactions recorded with the SEC on Friday.
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).
This High-Yielding REIT’s CEO Buys Some Shares
From the looks of it, Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP) registered the most noteworthy insider buying of last week. Chairman and CEO Colin V. Reed purchased 7,377 shares on Friday at a price tag of $53.44 each, lifting his direct ownership stake to 1.02 million shares. This stake includes 533,289 shares credited to Mr. Reed’s supplemental executive retirement plan (SERP) account.
The real estate investment trust specializing in destination hotel assets in urban and resort markets has seen the value of its stock gain 4% since the start of the year. Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP)’s owned assets include a network of four upscale resorts managed by Marriott International Inc. (NASDAQ:MAR) under the Gaylord Hotels brand. The REIT plans to pay a quarterly cash dividend of $0.75 per share in July, October and January, with this quarterly dividend payment yielding an impressive 5.58% annually. Gilchrist Berg’s Water Street Capital was the owner of 1.01 million shares of Ryman Hospitality Properties Inc. (REIT) (NYSE:RHP) at the end of March.
The next two pages of this article will reveal noteworthy insider activity registered at four other companies.