Cluster of Insider Buying at High-Yielding Mortgage REIT and Other Insider Trading Before Year-End

Voluminous insider buying is generally interpreted as a bullish signal by the investment community, as there appears to be only one reason corporate insiders would buy shares in their own companies. Unlike many indicators based on historical data, insider buying usually serves as a forward-looking indicator. Most of the time, insider purchases reveal that corporate insiders believe their company’s stock is worth more than the price tag set by the invisible hand of Mr. Market and they tend to be quite accurate in those beliefs.

Past research, analysts, and insider trading experts suggest that clusters of insider buying are significantly more informative than single buys. This means that a herd of insiders buying shares is a much better signal than a ‘lone wolf’ buying shares, who may be wrong at times. As Dr. Inan Dogan, the founder of Insider Monkey and a well-known researcher in the field of insider trading said in an interview held a little while ago: “One insider might overestimate a company’s prospects, but there is higher certainty when many insiders are buying.” With that in mind, the following article will reveal a cluster of insider buying recently observed at one company, as well as discuss other notable insider transactions reported with the SEC on Wednesday.

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Cluster of Insider Buying at Mortgage REIT Before Year-End

Let’s begin our discussion with the cluster of insider buying witnessed at ARMOUR Residential REIT Inc. (NYSE:ARR), where three high-ranking executives bought shares earlier this week. Chief Financial Officer James R. Mountain bought 2,000 shares on Wednesday at a price tag of $21.67 per share, lifting his overall holding to 12,998 shares. Jeffrey J. Zimmer, the Co-Chief Executive Officer, Co-Vice Chairman and President of ARMOUR since November 2009, purchased 8,000 units of common stock on the same day for $21.67 each. After the purchase, Mr. Zimmer currently owns an aggregate of 84,126 units of common stock. Last but not least, Scott J. Ulm, Co-Chief Executive Officer, Co-Vice Chairman, Chief Investment Officer, and Head of Risk Management, snatched up 7,000 shares on Wednesday at $21.54 apiece. The purchase lifted Mr. Ulm’s ownership to 79,426 shares.

The shares of ARMOUR Residential REIT Inc. (NYSE:ARR), which invests in residential mortgage backed securities and mortgage loans in the United States, are down by a little less than 1% thus far in 2016. Most investors may be reluctant to touch any mortgage-backed securities after the financial crisis of 2008, as these derivatives represented the culprit of the sub-prime mortgage collapse. Nonetheless, ARMOUR’s portfolio predominantly consists of mortgage-backed securities backed by quasi-government agencies such as Fannie Mae or Freddie Mac, so a possible investment in the REIT does not seem overly risky. In early-November, the REIT announced a cash dividend of $0.22 for December, which equates to an annual dividend yield of 12.2%. Andy Redleaf’s Whitebox Advisors had around 820,000 shares of ARMOUR Residential REIT Inc. (NYSE:ARR) in its portfolio at the end of the third quarter.

The next two pages of this insider trading article will discuss the fresh insider buying and selling at four other companies.

Board Member of Well-Known RV Manufacturer Buys Some Shares

One member of Winnebago Industries Inc. (NYSE:WGO)’s Board of Directors piled up some shares this week. William C. Fisher, appointed to the company’s Board in late-March 2015, purchased 3,000 shares on Tuesday at a price of $33.80 per share, a purchase that boosted his ownership stake to 11,600 shares.

The U.S. manufacturer of recreational vehicles (RVs) used in leisure travel and outdoor recreation has seen the value of its shares advance by 61% since the beginning of the year, so the insider purchase mentioned above may seem surprising to some. In early-October, Winnebago Industries Inc. (NYSE:WGO) announced the acquisition of Grand Design, a fast-growing manufacturer of towable recreational vehicles, for around $500 million. The acquisition is set to create a more balanced portfolio of motorized and towable products. There were a total of 14 hedge funds tracked by Insider Monkey with long positions in Winnebago Industries at the end of the third quarter, which amassed approximately 14% of the company’s outstanding common stock. Royce & Associates, founded by Chuck Royce, was the equity holder of 2.52 million shares of Winnebago Industries Inc. (NYSE:WGO) at the end of September.

Executive at Low-Priced Independent Energy Company Boosts Ownership Stake

A member of Samson Oil & Gas Limited (ADR) (NYSEMKT:SSN)’s executive team purchased shares at the end of the previous week. Mark Ulmer, Vice President of Engineering and Operations, snapped up 86,696 shares last Friday at a weighted average price of $0.63 per share. Mr. Ulmer currently owns an aggregate of 5.82 million shares following the Friday purchases.

The shares of the independent energy company, primarily engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties, are 70% in the green so far in 2016. Samson Oil & Gas Limited (ADR) (NYSEMKT:SSN)’s conducts its exploration and development activities in the Madison Group reservoirs in the Williston Basin in Williams and McKenzie Counties, North Dakota, and in Roosevelt County in Montana. The company’s main exploratory play is located in the Paradox Basin in Utah. The energy company’s oil production increased to 90,957 barrels for the September quarter from 60,723 barrels generated in the same period of the previous year. Jim Simons’ Renaissance Technologies reported owning around 109,000 shares of Samson Oil & Gas Limited (ADR) (NYSEMKT:SSN) through the latest round of 13F filings.

The final page of this article discusses the fresh insider selling observed at two other companies.

Insiders at Ethanol Company Sell Shares Near 52-Week High

Several insiders at REX American Resources Corp (NYSE:REX) have been offloading shares over the past several weeks, so let’s have a quick look at some recent insider selling. Stuart A. Rose, the Executive Chairman of the Board, discarded 2,300 shares on Tuesday through multiple transactions at prices that fell between $100.50 and $100.70 per share. Mr. Rose currently owns 590,276 shares following the transactions discussed above and a number of other transactions conducted last week. Board member Lawrence Tomchin liquidated 2,000 shares on Friday at $100 apiece and an additional 2,000 shares last Tuesday for $101 each, cutting his overall holding to 121,819 shares. Douglas L. Bruggeman, Chief Financial Officer, Vice President of Finance and Treasurer, sold 1,000 shares last Wednesday at a price tag of $102 per share. Mr. Bruggeman currently holds an ownership stake of 30,151 shares after last week’s transaction.

The ethanol company has seen its market capitalization increase by 84% since the beginning of the year. REX American Resources Corp (NYSE:REX)’s net sales and revenue for its fiscal third-quarter were around $116.3 million, up from $110.6 million recorded for the same period of its previous fiscal year. Ethanol sales increased to $90.7 million from $82.8 million, reflecting an increase of 5.5 million gallons sold. Meanwhile, dried distillers grains sales dropped to $19.6 million from $22.5 million, mainly due to a $24.30 decline in the price per ton sold. The decrease in the selling price mainly reflects uncertainty around Chinese imports of domestic dried distillers grains, as the China Ministry of Commerce announced an anti-dumping and countervailing duty investigation in January 2016 and imposed an anti-dumping tariff and a countervailing duty on U.S. dried distillers grains exports to China. Ken Griffin’s Citadel Advisors added a 31,039-share stake in REX American Resources Corp (NYSE:REX) to its pool of holdings during the third quarter.

Director at Forward Air Corporation Sells Shares Before Christmas

One member of Forward Air Corporation (NASDAQ:FWRD)’s Board disclosed the sale of a block of shares on Wednesday. Board member C. Robert Campbell discarded 4,000 shares on December 14 at a price tag of $47.78 per share. Following the not-so-distant sale, Mr. Campbell currently owns a total of 19,684 shares.

Forward Air Corporation (NASDAQ:FWRD) provides time-definite transportation services to the North American deferred air freight market, provides expedited truckload brokerage, dedicated fleet services and maximum security and temperature-controlled logistics services, offers container and intermodal drayage services, as well as provides pool distribution services. The shares of the company are 10% in the green this year. Forward Air Corporation’s top-line figure for the September quarter increased to $249.5 million from the slightly lower figure of $247.1 million recorded a year earlier. The 16 asset managers in our system that were invested in Forward Air at the end of the September quarter had accumulated around 13% of the company’s outstanding shares. Mariko Gordon’s Daruma Asset Management initiated a 753,525-share stake in Forward Air Corporation (NASDAQ:FWRD) during the September quarter.

Disclosure: None