High-Ranked Executive at Struggling Specialty Retailer New York & Company Inc. (NWY) Buys Shares; Plus Other Insider Trading

The so-called insider trading anomaly could be viewed as one of the most profitable investment strategies in the past several decades or so. Generally, information represents a valuable commodity and corporate insiders have a great deal of information; insiders hold more useful and up-to-date information than do outsiders such as journalists, bloggers or even stock analysts.

Of course, insiders make mistakes on some occasions just like any other human beings; they may formulate the wrong assumptions or they cannot predict the effects of macroeconomics factors on their company’s operations. However, the probability of insiders coming to the wrong conclusion is much smaller when more than one insider come to the same conclusion: buy. This essentially means that corporate insiders should seek to identify clusters of insider buying, although groups of insiders buying shares in unison may come to the wrong conclusion on a very few occasions as well. For instance, flash-based data storage developer Violin Memory filed for bankruptcy protection last year after numerous insiders purchased shares throughout 2016 and 2015. The bottom line is that insider buying should not represent the sole indicator when deciding on whether to buy a company’s shares, but insider trading behavior should represent an important feature of one’s stock analysis process. Having this in mind, the following article will lay out a list of noteworthy insider transactions reported with the SEC on Monday.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Cluster of Insider Buying at Expanding Oil and Gas Producer

Let’s begin our discussion by analyzing a cluster of insider buying observed at WPX Energy Inc. (NYSE:WPX). To start with, President and Chief Executive Officer Richard E. Muncrief purchased 20,000 shares on Thursday at a price of $13.35 per share, lifting his overall holding to 732,481 shares. Lead independent director William G. Lowrie bought 5,000 shares on the same day for $13.35 each, a purchase that increased his ownership stake to 242,076 shares. Last but not least, Board member Kelt Kindick purchased a 10,000-share block on Thursday at $13.35 apiece. Mr. Kindick currently owns an aggregate of 103,626 shares following the recent purchase.

Earlier this year, the oil and gas producer announced an agreement to purchase assets in the Delaware basin for $775 million in an attempt to expand its position in the oil-rich Permian region. The assets generate around 6,500 barrels of oil equivalent per day from 23 producing wells, two drilled but uncompleted horizontal laterals, 18,100 net acres in several counties in Texas and 920 gross undeveloped locations in the geologic sweet spot of the Delaware Basin. WPX Energy Inc. (NYSE:WPX) said it would fund the deal through cash on hand and an equity offering, in which the insiders mentioned above also participated. The company’s shares have gained an impressive 269% in the past year. Clint Carlson’s Carlson Capital L.P. held 6.44 million shares of WPX Energy at the end of the September quarter.

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

High-Ranked Executive at Struggling Specialty Retailer Buys Shares Amid Pressure from Shareholders

One of the most well-informed and influential executives at New York & Company Inc. (NYSE:NWY) purchased some shares this past week. John M. Worthington, President and Chief Operating Officer since early November 2014, snapped up 11,500 shares on Friday at a price of $2.22 per share. After the recent purchase, Mr. Worthington currently owns a total of 356,200 shares.

The specialty retailer of women’s fashion apparel and accessories, and the modern wear-to-work destination for women has seen the value of its shares decline by 3% in the past year and 30% in the past five years. New York & Company Inc. (NYSE:NWY)’s management recently revealed that comparable store sales for the nine weeks that ended December 31 fell by around 1.7% amid a challenging retail landscape, characterized by soft traffic and a highly promotional environment. Just recently, Kanen Wealth Management LLC, a shareholder of the specialty retailer that invested based on management’s communication of cost savings and a long-term target of a high single digit operating margin announced back in 2013, sent a letter to the company’s board and management disclosing their dissatisfaction with the poor stock performance and the management’s failure to deliver on their promises. As a result, the shareholder is calling for a detailed review of all expenses, a $30 million stock buyback, as well as a new board member. Royce & Associates, founded by Chuck Royce, owned approximately 848,000 shares of New York & Company Inc. (NYSE:NWY) at the end of September.

CEO of Strong-Performing Community Bank Keeps Buying Shares

The man in charge of Peoples Financial Corp (NASDAQ:PFBX), who has been boosting his holding consistently over the past several months, purchased a few shares last week as well. CEO and President Chevis C. Swetman bought 1,000 shares on Tuesday at a price tag of $15.25 each. Mr. Swetman currently owns an aggregate of 303,416 shares following the small purchase mentioned above.

Had investors piggybacked the security purchases of the community bank’s CEO throughout 2016, they could have enjoyed strong returns as the company’s shares have gained 69% in the past year. Peoples Financial Corp (NASDAQ:PFBX) serves the financial and trust needs of its customers in the portions of Mississippi, Louisiana and Alabama within a fifty-mile radius of the Waveland, Wiggins and Gautier branches, the bank subsidiary’s three most outlying locations. The company generated net income of $542,000 for the first three quarters of 2016, as compared with a net loss of $5.31 million incurred in the same period of 2015. Jeffrey Gendell’s Tontine Asset Management had roughly 247,000 shares of Peoples Financial Corp (NASDAQ:PFBX) in its 13F portfolio at the end of the third quarter.

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

Executive at Business Process Services Company Sells Some Shares

One member of SYNNEX Corporation (NYSE:SNX)’s management team offloaded some shares last week. Peter Larocque, President of U.S. Distribution at the company, sold 3,868 shares on Friday at prices varying from $125.31 to $125.75 per share. Mr. Larocque currently owns an aggregate of 10,435 shares after the sale.

The shares of the business process services company have jumped by 54% in the past year, which explains the sale mentioned above and some additional insider selling discussed by Insider Monkey in early October. SYNNEX Corporation (NYSE:SNX)’s revenue for the fiscal year that ended November 30 increased to $14.06 billion from $13.34 billion recorded for the prior fiscal year. The company’s boardroom recently declared a quarterly cash dividend of $0.25 per share, which equates to a current dividend yield of 0.82%. The number of asset managers from our system invested in SYNNEX rose to 17 from 13 during the third quarter. George Hall’s Clinton Group added an almost 50,000-share stake in SYNNEX Corporation (NYSE:SNX) to its equity portfolio during the third quarter.

Expected Spike in Insider Selling at Convenience Store Operator

The insider selling activity at CST Brands Inc. (NYSE:CST) was quite intense in the last months of 2016 and insiders keep selling in 2017. Charles H. Adams, President of Retail Operations at the company, liquidated 7,000 shares last Monday at a weighted average price of $48.20 per share, cutting his ownership to 4,775 shares.

In late August, the independent retailer of motor fuels and convenience merchandise agreed to be acquired by Quebec-based convenience store operator Alimentation Couche-Tard for $4.4 billion. Hence, the insider sale discussed above should not represent a reason for concern. In fact, numerous players in the hedge fund industry have also been trimming their positions in CST Brands Inc. (NYSE:CST) after the acquisition announcement. The number of asset managers tracked by Insider Monkey with long positions in the convenience store retailer decreased to 24 from 31 during the three months that ended September. Havens Advisors, founded by Nancy Havens-Hasty, reported owning 78,000 shares of CST Brands Inc. (NYSE:CST) in its 13F filing for the fourth quarter.

Disclosure: None