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Heavy Insider Buying at Bank of America Corp (BAC) and Two Other Struggling Companies

Overstock.com Inc. (NASDAQ:OSTK) is another struggling company that had one member of its Board of Directors purchase shares last week. Joseph J. Tabacco Jr., who has been a director since June 2007, snapped up 15,000 shares on Thursday for $14.45 each and currently holds a stake of 56,683 shares. The online retailer has seen its shares plummet 36% over the past 12 months, despite surging by 16% since the beginning of 2016. The company experienced slowing revenue growth in the second half of 2015, presumably because of changes in natural search engine algorithms implemented by Google. This led to increased marketing expenses, as the company sought to reach customers through other marketing channels, including sponsored search and display ad marketing. Nonetheless, Overstock.com’s revenue for 2015 totaled $1.66 billion, up from $1.50 billion reported for 2014. Non-GAAP contribution increased 8% year-over-year to $186.1 million. It is important to note that the company’s Club O loyalty program has been playing a more prominent role in revenue growth, while the company’s management made some changes to its program by adding a two-tiered structure. In January 2014, the company started accepting bitcoins as payment on its website, as well as hold bitcoin and other cryptocurrencies directly, which might be bear some risks given the negative sentiment around the bitcoin and exchange rate risks associated with this decision. Fairfax Financial Holdings, founded by Prem Watsa, owns 3.18 million shares of Overstock.com Inc. (NASDAQ:OSTK) as of December 31.

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Let’s wrap up our discussion by analyzing the insider buying activity at Covanta Holding Corp (NYSE:CVA). President and Chief Executive Officer Stephen J. Jones acquired 15,000 shares on Friday at prices that ranged from $13.00 to $13.24 per share and increased his overall holding to 55,444 shares. The CEO also owns an indirect stake of 90,000 shares, which is held by his spouse’s trust. Covanta Holdings is one of the world’s largest owners and operators of infrastructure for the transformation of waste to energy, known as energy-from-waste or simply EfW. The company’s EfW facilities derive revenue from the disposal of waste, the generation of electricity and steam, and sale of metal recovered during the EfW process. Covanta Holding generated total revenue of $1.65 billion during 2015, which marked a decrease of $37 million year-on-year. The decrease was mainly attributable to a decrease in energy, recycled metals and construction revenue due to lower energy prices and fall in recycled metal market prices. However, the decrease was somewhat offset by higher new waste and service revenue. The shares of the self-proclaimed leader in sustainable waste and energy solutions are down by 38% over the past year, and have declined by 16% since the beginning of 2016. On Thursday, analysts at Stifel upgraded the stock to ‘Buy’ from ‘Hold’, assigning a price target of $16.50. The number of hedge funds tracked by our team with positions in Covanta dropped to 13 from 19 during the December quarter. Billionaire Jim Simons‘ Renaissance Technologies’ mathematical models suggest that Covanta Holding Corp (NYSE:CVA)’s stock is poised for a rebound in 2016, as the fund lifted its stake in the company by 25% during the fourth quarter to 3.36 million shares.

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Disclosure: None

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