Jefferies’ Parent Company and Two Other Stocks See Insiders Pile up Shares

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.

High-Flying U.S. Oil Producer Sees CEO Buy Shares

QEP Resources Inc. (NYSE:QEP) had not seen any insiders buy shares for quite some time until this week. President and CEO Charles B. Stanley bought 16,763 shares on Thursday for roughly $17.85 each, boosting his ownership to 759,116 shares. Some of these shares are held in a trust for which Mr. Stanley and his spouse are trustees.

The shares of the independent crude oil and natural gas production company are up an impressive 31% since the beginning of 2016. Just recently, QEP Resources Inc. (NYSE:QEP) announced plans to buy 9,400 acres in the Permian Basin of Texas from unnamed sellers for $600 million, one of the most recent acquisitions in the sector as crude oil prices are settling around $50 per barrel. The deal will be partially funded with equity raised from the sale of 23 million shares through an underwritten public offering, which generated gross proceeds of roughly $413.0 million. Analysts believe that the aforementioned transaction seems to be extremely expensive, with the deal being worth approximately $64,000 an acre, while many recent deals in the region have been around $30,000 an acre. At the end of June, analysts at Fitzgerald raised their price target on the Denver-based driller to $20 from $18 and reiterated their “Buy” rating, saying that “In addition to extending the company’s Permian runway by over 50%, we are lowering our risk weighting on the company’s portfolio to 25% from 35%…”.

There were 30 asset managers followed by Insider Monkey with equity investments in the U.S. oil producer at the end of the first quarter, accumulating roughly 15% of the company’s total number of outstanding shares. Ken Griffin’s Citadel Advisors LLC was the owner of 3.18 million shares of QEP Resources Inc. (NYSE:QEP) at the end of March.

Struggling Modular Carpet Company See Top-Tier Executive Buy Shares

Interface Inc. (NASDAQ:TILE) had not registered any insider buying since late 2014 until this week. Jay Gould, President and Chief Operating Officer, snatched up 10,000 shares on Wednesday at prices varying from $14.68 to $14.88 per share. After the recent purchase, Mr. Gould currently owns 103,961 shares.

The modular carpet company has seen its market value plunge by 20% since the start of 2016, partially due to the United Kingdom’s decision to leave the European Union. Roughly 26% of Interface Inc. (NASDAQ:TILE) revenues for the three months that ended April 3 were derived from Europe, so the company’s exposure to both Europe and the United Kingdom makes Interface vulnerable to political and economic havoc in the region. In fact, the company said its financial results were impacted by significant uncertainty in the region partially caused by the vote on the exit of the United Kingdom from the 28-member bloc. Interface posted net sales of $222.55 million for the quarter that ended April 3, down from $236.90 million recorded a year ago. Fluctuations in currency exchange rates hit the top line by approximately $3.7 million.

There were 20 money managers tracked by our team with long positions in Interface at the end of the March quarter, as compared to 21 managers recorded at the end of the previous quarter. Those 20 managers hoarded up nearly 13% of the company’s total number of outstanding shares. Jim Simons’ Renaissance Technologies LLC upped its position in Interface Inc. (NASDAQ:TILE) by 24% during the January-to-March period to 1.35 million shares.

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