Past research found that corporate insiders generate superior profits relative to public investors and other stock market players even when they only trade on publicly-available information. Of course, corporate insiders tend to have more knowledge about their company’s current developments and future prospects than any of us, so they might be incidentally trading on non-public information.
There are not many why reasons corporate insiders purchase shares in their own companies, with the primary one being that these highly-informed individuals believe their companies’ shares are severely undervalued. As a general rule, corporate insiders follow the pattern of ‘buying low and selling high’, so it does make sense to keep close tabs on both insider buying and selling activity. That being said, let’s have a quick look at a set of noteworthy insider transactions reported with the SEC on Tuesday.
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).
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Freshly-Appointed CFO of Nation’s Third-Largest Airline by Traffic Purchases Shares
One highly-informed and influential executive at United Continental Holdings Inc. (NYSE:UAL) filed Tuesday to disclose the purchase of a sizable block of shares. Andrew C. Levy, the company’s freshly-appointed Executive Vice President and Chief Financial Officer, snapped up 15,000 shares on Friday at prices that ranged from $50.95 to $50.96 per share. After the recent purchase, the former President of low-cost carrier Allegiant Travel currently owns 20,791 shares of United Continental.
Apart from the factors that impacted all airlines in the past year or so, the third-largest airline by traffic in the United States also had to rebuild and refresh its management team and Board, partially due to pressure from two hedge fund firms. Intensifying competition over fares, a slowdown in demand for certain routes due to worries over terrorism and the Zika virus, as well as slightly higher fuel prices, put some pressure on United Continental Holdings Inc. (NYSE:UAL)’s stock and financial performance in recent months. United Continental’s shares are 10% in the red thus far in 2016. Ken Griffin’s Citadel Advisors acquired a new stake of 4.30 million shares of United Continental Holdings Inc. (NYSE:UAL) during the second quarter.
Follow United Airlines Holdings Inc. (NYSE:UAL)
Follow United Airlines Holdings Inc. (NYSE:UAL)
Let’s head to the next pages of this article, where we’ll discuss notable insider buying registered at two companies.
