Past research indicates that corporate insiders follow a pattern of “buying low and selling high”, which, essentially, is the primary reason investors keep track of insider trading metrics. More importantly, strong insider buying is believed to convey only positive information, as this kind of activity suggests that insiders believe the share price of their company’s stock will reach higher levels in the future.
Nonetheless, examining all insider purchases reported with the SEC is intensive work considering the immense number of stocks trading on U.S. stock exchanges, and here is where Insider Monkey comes in. Our insider trading articles usually cover the most noteworthy insider purchases and sales reported with the SEC each trading session, so one could read these almost daily articles to find possible investment opportunities. However, there are higher odds of successfully taking advantage of the insider purchase premium by investing in a high number of stocks registering insider buying, as an investment in a single company may not yield the desired and expected return. Hence, Insider Monkey believes investors should incorporate insider metrics as part of a broader stock selection and analysis process. That said, the following article will discuss several noteworthy insider purchases reported with the SEC on Thursday.
Through extensive research, we have determined that the due diligence that the investors in our database employ, as well as their long-term focus makes them perfect targets to emulate. However, the results of our analysis have also shown that the small-cap picks of these funds can generate much better returns, with the 15 most popular small-cap stocks beating the market by an average of 95 basis points per month (read more details here).
Parent Company of Investment Banking Firm Jefferies Registers Notable Insider Buying
Leucadia National Corp. (NYSE:LUK) recently registered the most valuable insider purchase of 2016. Board member W. Patrick Campbell snapped up 56,737 shares on Thursday at a weighted average cost of $17.15 per share. After the recent sizable purchase, Mr. Campbell currently holds an ownership stake of 107,920 shares.
The parent company of securities and investment banking firm Jefferies has seen its shares gain nearly 7% in the past three months, but the stock is flat year-to-date. Leucadia National Corp. (NYSE:LUK) also owns and has investments in a wide array of other businesses, including beef processing, oil and gas E&P, and fixed wireless broadband services businesses. However, revenues generated from the beef processing business accounted for 81% of the company’s first-quarter top line, while Jefferies revenues made up roughly 15% of the $2.02 billion-revenues figure. At the end of June, the investment bank owned by Leucadia National reported its financial results for the fiscal second quarter that ended May 31, showing that total sales and trading net revenues rose by roughly 21% year-over-year to $462 million as financial markets were more stable after a tumultuous start to 2016. The bank’s financial results reflected better equity and fixed income secondary trading conditions, although the business of underwriting stocks and bonds remained muted.
The number of hedge funds managers from our system with stakes in Leucadia National rose to 33 from 29 during the first quarter of 2016, with those managers amassing 13% of the company’s outstanding common stock on March 31. Scopia Capital Management, run by Matt Sirovich and Jeremy Mindich, acquired a new stake of 6.56 million shares of Leucadia National Corp. (NYSE:LUK) during the March quarter.
Let’s head to the next page of this insider trading article, where we will reveal the insider buying registered at two other companies.