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Massive Clusters of Insider Buying at Synalloy (SYNL) and Providence Service (PRSC), Plus Insider Transactions at 3 Other Companies

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Each piece of insider buying activity is worth the attention of the investment community regardless of the number of shares bought by corporate insiders. Even the insider buying conducted by freshly-appointed Board members and executives to meet the stock ownership guidelines imposed by their companies represents a positive indicator. Why? Because the whole purpose of these stock ownership guidelines is to align shareholders’ interests with those of the executive team.

However, retail investors should not blindly mimic each insider purchase. Instead, investors should incorporate insider trading metrics into their investment selection and research process, a practice used by successful hedge fund firms as well. Insider Monkey does not attempt to propagate investment opportunities through our daily insider trading articles, as some might suggest; this is outside our scope. Insider Monkey’s underlying purpose is to help investors and other stock market participants make more informed decisions. Without deviating too much from the purpose of this article, let’s have an in-depth look at a set of noteworthy insider transactions reported with the SEC on Wednesday.

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

Insider Trading

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Cluster of Insider Buying Observed at Struggling U.S. Steel Products Maker

Five different insiders at Synalloy Corporation (NASDAQ:SYNL) purchased some of the company’s stock earlier this week, a massive cluster of insider buying that investors should not overlook. To begin with, J. Kyle Pennington, the President of Synalloy Metals (a subsidiary of the company), purchased 3,800 shares on Tuesday at a price tag of $7.47 each, lifting his overall holding to 33,315 shares. Sarah M. Cunningham, Vice President of Corporate Administration, snapped up 4,000 shares on Wednesday for $7.32 each, which boosted her ownership to 11,458 shares. Chief Financial Officer and Senior Vice President Dennis M. Loughran acquired 10,000 shares on Tuesday at $7.51 apiece. Following the recent purchase, Mr. Loughran currently owns 43,345 shares. Moreover, board member Henry L. Guy snatched up a 20,000-share block on the same day at a cost of $7.45 per share, boosting his stake to 32,209 shares. Last but certainly not least, President and CEO Craig C. Bram purchased 26,500 units of common stock on Tuesday for $7.46 each, which increased his ownership to 161,552 units.

The U.S. steel products maker has seen its market cap jump by 12% since the beginning of the year, but the company has still lost 56% of its market value in the past two years. Synalloy Corporation (NASDAQ:SYNL) posted net sales of $34.91 million for the second quarter, a decrease of $15.26 million year-over-year. Falling nickel prices weighed heavily on stainless steel pipe sales in 2016. Royce & Associates, founded by Chuck Royce, was the owner of 617,533 shares of Synalloy Corporation (NASDAQ:SYNL) at the end of June.

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The next two pages of this article will reveal several other noteworthy insider transactions reported with the SEC on Wednesday.

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