The profitability of insider trading has been studied in numerous studies over the past several decades, with most studies concluding that corporate insiders are better informed about their company’s future prospects than market analysts, retailer investors, asset managers or journalists. Most studies ended up concluding that insiders trade profitably on the “privileged” information they they access to.
Most of these studies find that insiders earn significant abnormal returns when purchasing securities, as well as conclude that purchases are more informative than sales. At the end of the day, there’s a wide range of reasons to sell shares, such as liquidity needs or portfolio diversification, but the fundamental reason for buying shares is to make a profit. Past research also shows corporate insiders are extremely good at timing their transactions, as they successfully follow the pattern of buying low and selling high. In fact, the contrarian approach to investing employed by insiders serves as one explanation for their trading success. All in all, retail investors may find insider trading metrics very useful for their stock selection and analysis processes. Without further ado, let’s discuss a set of noteworthy insider transactions reported with the SEC on Tuesday.
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Two Insiders at Convenience Store Operator Buy Shares After Earnings Release
To start with, let’s have a quick look at the insider buying activity at Murphy USA Inc. (NYSE:MUSA), where two insiders purchased shares at the beginning of the week. Board member Claiborne P. Deming bought 15,000 shares on Tuesday at a price tag of $65.39 each, boosting his ownership to 233,989 shares. Senior Vice President John P. Corrigan initiated a new stake of 500 shares on Monday at $66.48 apiece, as well as purchased an additional 500 shares on Tuesday for $65.61 each.
The marketer of retail motor fuel products and convenience merchandise has seen the value of its shares advance by 8% in the past year. Murphy USA Inc. (NYSE:MUSA) recently released its financial results for the three and twelve months that ended December 31, reporting net income of $221.5 million for the full year 2016 versus $176.3 million in 2015. The bottom-line figure grew year-over-year despite operating in the weakest retail fuel margin environment since 2010, thanks to a more efficient operating structure. The company added 37 new stores during the fourth quarter, bringing the total count to 1,401 locations at the end of the year. Murphy USA anticipates to generate net income in the range of $140-to-$190 million in 2017. Matthew Tewksbury’s Stevens Capital Management trimmed its position in Murphy USA Inc. (NYSE:MUSA) by 41% during the fourth quarter to around 24,000 shares.
The next pages of this article discuss fresh and noteworthy insider buying and selling observed at several other companies.