Cluster of Insider Selling at Cracker Barrel (CBRL), Retiring CEO of TE Connectivity (TEL) Sells Shares, Plus Other Insider Activity

Several Executives at BDC Buy Shares After Announcing Big Dividend Cut

Two high-ranked executives at PennantPark Investment Corp. (NASDAQ:PNNT) also increased their holdings this past week. Aviv Efrat, Chief Financial Officer and Treasurer since February 2007, bought 28,000 shares on Wednesday at $7.08 apiece, a purchase that lifted his ownership to 96,102 shares. More importantly, Arthur H. Penn, the Founder, CEO and Chairman of PennantPark Investment, snapped up 10,000 shares for $7.09 each on Wednesday and 10,000 shares at $7.23 apiece on Friday, all of which are held by Pennant Park Investment Advisors LLC (of which Mr. Penn is the Managing Member), which currently owns 449,923 shares. Mr. Penn also holds a direct ownership stake of 183,400 shares.

PennantPark Investment Corp. (NASDAQ:PNNT) operates as a business development company (BDC) that provides debt and equity investments to U.S. middle-market companies in the form of senior secured debt, mezzanine debt and equity investments. The insider buying discussed above comes shortly after the BDC reported weaker-than-expected earnings and announced a cut in its quarterly dividend payment to $0.18 from $0.28 per share beginning from the first quarter of 2017. Nonetheless, one analyst from Baird believes PennantPark Investment’s income from investments will not even cover the reduced dividend. The analyst also recently suggested that the BDC is not receiving income from its group of energy-related loans. “Until the company begins preserving shareholders capital and covering its dividend with cash income, we believe the path of least resistance for the stock will be lower. We would be inclined to short the stock but the costliness of doing so against its 10% dividend yield leaves us reluctantly with a Neutral rating,” said the Baird analyst in a recent note. The shares of PennantPark are 19% in the green year-to-date. Peter Muller’s PDT Partners had 55,700 shares of PennantPark Investment Corp. (NASDAQ:PNNT) in its portfolio at the end of September.

Board Member of Prison REIT Buys Shares After Donald Trump’s Presidential Win

One member of Corecivic Inc. (NYSE:CXW)’s Board piled up some shares last week. Mark A. Emkes, Chairman of the Board of Directors, acquired 5,000 shares on Friday at prices varying from $22.06 to $22.09 per share. After the recent purchase, Mr. Emkes currently owns an aggregate of 35,755 shares.

The real estate investment trust specializing in owning and managing prisons and other correctional facilities has seen the value of its stock drop by 15% this year. Corecivic Inc. (NYSE:CXW)’s shares have been battered following the Justice Department’s decision to limit the role private prison operators play in managing federal prison populations. However, the election of Republican Donald Trump as the next President of the United States has triggered a surge in Corecivic’s shares. Trump has promised tougher law-and-order policies, as well as promised to deport up to 11 million people. Therefore, it would be safe to say that millions will need to be jailed during deportation proceedings should Trump keep his campaign promises, which implies more business for Corecivic and other prison operators. The number of hedge fund vehicles that we track in our system with long positions in Corecivic jumped to 27 from 15 during the third quarter. Paul Singer’s Elliott Management added a 2.31 million-share position in Corecivic Inc. (NYSE:CXW) to its portfolio during the September quarter.

On the final page of this insider trading article, we’ll discuss the fresh insider selling observed at two other companies.