CEO of High-End Restaurant Chain Buys Shares, Oil and Gas Company’s Execs Sell Shares After OPEC Deal, Plus Other Insider Trading

Keeping tabs on insider trading behavior can be an important aspect of an investors’ stock analysis process, as past research shows that insiders’ actions in the open market can offer an accurate reflection of their companies’ prospects, as well as their respective industries’ prospects. Intuitively, this makes perfect sense. At the end of the day, corporate insiders possess a broad set of skills and characteristics that could be used to describe the “value-oriented” type of investors.

For instance, Board members and executives have extensive knowledge of their companies and industries, have a tendency to employ a contrarian approach to investing, as well as have a tendency to maintain a long-term perspective. For that reason, insider trading activity, especially insider buying, represents a valuable source of information for long-term-oriented investors. As legendary investor Peter Lynch once said, corporate insiders may sell shares of their own companies for a variety of reasons such as estate planning or diversification, but there is only one reason they buy – they believe the price is going up. By examining the Form 4 filings submitted with the SEC on Thursday, Insider Monkey identified a set of noteworthy insider transactions at five U.S. publicly-traded companies that might be of interest to the investment community.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Newly-Appointed Member at Organic-Food Producer Initiates Stake

A freshly-appointed member of SunOpta Inc. (USA) (NASDAQ:STKL)’s Board of Directors acquired a new stake earlier this week. Board member Albert D. Bolles purchased a new stake of 40,000 shares on Thursday at prices ranging from $7.30 to $7.40 per share, aligning his interests with those of other shareholders in a good faith gesture.

In early-October, SunOpta Inc. (USA) (NASDAQ:STKL) announced an agreement with private equity investor Oaktree Capital Management, pursuant to which the investment management firm invested $85 million in SunOpta in the form of exchangeable preferred shares. As part of the deal, the company that provides organic ingredients like grains, nuts and fruits to organic-food producers appointed two Oaktree-nominated Independent Directors, one of which was Dr. Bolles. SunOpta used the proceeds from Oaktree to reduce its second lien debt and increase its financial flexibility. In partnership with representatives of Oaktree and representatives of another shareholder, the organic-food company has been conducting a review of its operations, management and governance. The shares of SunOpta are 6% in the green this year after having gained an impressive 55% in the past six months. Glenn W. Welling’s Engaged Capital, the other shareholder that is assisting the company with the review, was the owner of 6.43 million shares of SunOpta Inc. (USA) (NASDAQ:STKL) at the end of September.

Let’s move on to the next page of this article, where we’ll discuss fresh insider buying observed at two other companies.

Interim CEO of Low-Priced Imation Purchases Shares

The man in charge of low-priced Imation Corp. (NYSE:IMN) purchased a block of shares earlier this week. Interim Chief Executive Officer Robert B. Fernander bought 50,000 shares on Tuesday at prices that fell between $1.06 and $1.15 per share. After the recent purchase, Mr. Fernander currently owns an aggregate of 755,909 shares.

Imation Corp. (NYSE:IMN) operates as a holding company involved in asset management, while the company’s Nexsan subsidiary runs a global enterprise data storage business. Imation’s net revenue from continuing operations (Nexsan) was $11.5 million for the September quarter, which marked a decrease of 20.7% year-over-year. The disturbing decrease in the company’s top-line was driven by the strategic decision to exit underperforming regions and low-margin portions of the business. There were six asset managers tracked by Insider Monkey invested in the company at the end of the third quarter, compared to eight funds recorded at the end of the June quarter. Those six money managers amassed 38% of the company’s outstanding common stock. John W. Rogers’ Ariel Investment had 8.06 million shares of Imation Corp. (NYSE:IMN) in its portfolio on September 30.

Freshly-Appointed CEO of High-End Restaurant Chain Boosts Stake

The most influential and well-informed executive at Del Frisco’s Restaurant Group Inc. (NASDAQ:DFRG) piled up some shares this week. Norman Abdallah, who took over the reins of leadership from Mark Mednansky in mid-November, snatched up 10,000 shares on Thursday at prices that ranged from $17.35 to $17.70 per share. Mr. Abdallah currently owns an aggregate of 21,768 shares following the recent purchase. Mr. Mednansky had been the CEO of Del Frisco’s Restaurant Group since March 2007 and guided the restaurant chain through its initial public offering in 2012.

Del Frisco’s Restaurant Group Inc. (NASDAQ:DFRG) develops, owns and operates three high-end, complementary restaurants. The chain operated 50 restaurants in 23 states and the District of Columbia at the beginning of September. The shares of Del Frisco’s have surged since the news emerged that Donald Trump was elected the next President of the United States, with analysts claiming that the high-end restaurant chain could be the biggest winner among restaurants should President-elect Trump cut income taxes. Trump proposed a simpler tax code with a 33% ceiling for the highest income bracket throughout the campaign, so upper-income consumers would enjoy the greatest tax benefit under Trump’s proposal. “The upscale nature of DFRG’s customer base (particularly at the Double Eagle) makes DFRG most likely among public chains to see a sales lift from a high-income consumer with significantly more disposable income,” said Credit Suisse analysts in a recent note. The shares of Del Frisco’s are up by 8% thus far in 2016. Steven Cohen’s Point72 Asset Management reported owning 268,000 shares of Del Frisco’s Restaurant Group Inc. (NASDAQ:DFRG) in its 13F filing for the September reporting period.

The final page of this article will discuss noteworthy insider selling observed at two other companies.

Executives at Crude Oil and Natural Gas Company Sell Shares After OPEC’s Production Cut

Two of the most well-informed executives at EOG Resources Inc. (NYSE:EOG) discarded shares earlier this week. To begin with, Chief Operating Office and President Gary L. Thomas offloaded 60,000 shares on Wednesday at prices ranging from $101.51 to $102.13 per share. After the recent sale, Mr. Thomas currently owns a total of 1.00 million shares. Timothy K. Driggers, Chief Financial Officer and Executive Vice President, sold 10,000 shares on the same day at a weighted average price of $102.08 per share, cutting his ownership stake to 148,477 shares.

The shares of the large U.S. independent non-integrated crude oil and natural gas company, which has proved reserves in the United States, Trinidad, the United Kingdom, and China are trading slightly below their 52-week high of $107.47. The shares of EOG Resources Inc. (NYSE:EOG) received an additional boost after OPEC agreed to a supply cut earlier this week. Following OPEC’s first stated production cut in eight years, analysts at Stifel raised their rating to ‘Buy’ from ‘Hold’ on four exploration and production companies, including EOG Resources. Prior to OPEC’s announcement, Stifel analysts had been concerned about downside oil price risk for EOG Resources due to the company’s lack of hedges. The crude oil and natural gas company has seen the value of its shares rise by 47% since the start of the year. Daniel S. Och’s OZ Management had around 1.54 million shares of EOG Resources Inc. (NYSE:EOG) in its portfolio at the end of September.

Executive Chairman of Leading Vehicle Rental Operator Unloads Shares

One of the most well-informed executives at Avis Budget Group Inc. (NASDAQ:CAR) offloaded a great deal of shares this week. Ronald L. Nelson, Executive Chairman of the Board of Avis Budget Group, liquidated 6,600 shares on Tuesday and 143,400 shares on Thursday at prices that fell in the range of $39.00 and $39.20 per share. Mr. Nelson currently holds an ownership stake of 594,574 shares after the latest sales.

The leading vehicle rental operator in North America, Europe, Australia, New Zealand and other regions has seen the value of its shares gain 7% this year. Avis Budget Group Inc. (NASDAQ:CAR) is the operator of three of the most recognized brands in the global vehicle rental and car sharing industry: Avis, Budget, and Zipcar, but investors have been worried about the possible impact of the phenomenon of “ride sharing” on the company’s business. According to fresh surveys, 82% of app-based car service journeys are under 30 miles and 93% are less than 60 miles, whereas Avis Budget’s average car rental transaction is four rental days and is more than 100 miles per day. Hence, while ride-hailing will represent a key part of the broader car mobility landscape in the foreseeable future, the car rental and ride-hailing industries could be complementary to each other going forward. Larry Robbins’ Glenview Capital added an 8.30 million-share stake in Avis Budget Group Inc. (NASDAQ:CAR) to its pool of holdings during the three-month period ended September 30.

Disclosure: None