Are a company’s corporate insiders buying or selling? That represents a relevant question for various types of investors in the stock market. One of the most important tools of fundamental security analysis revolves around knowing how insiders fell about their own company’s shares. After all, insider trading activity, both buying and selling, has been a fairly good predictor of future stock performance over the years.
As Board members and executives have access to information not generally available to the general public, it does make sense to keep track of what they do with their own shares. While not foolproof, numerous studies have concluded that insiders achieve fairly strong trading profits when buying shares their own company’s shares. One rule of thumb in financial markets says that insider buying is much more significant and informative than insider selling. Insiders sell shares for a variety of reasons such as estate planning, portfolio diversification, tax payments, to name just a few. Hence, sales should not be viewed as a sign of trouble unless multiple insiders are discarding large portions of their holdings at an alarming pace. On the other hand, insiders typically buy shares of their own company for one reason – the stock is cheap. With that in mind, let’s have a look at a set of noteworthy insider transactions reported with the SEC on Tuesday.
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Executive at Large U.S. Power Company Buys Shares
One member of Duke Energy Corp (NYSE:DUK)’s executive team added some shares to his holding last week. Franklin H. Yoho, Executive Vice President and President of the company’s natural gas business, bought 14,850 shares on Friday at a price tag of $74.00 each. Following the recent purchase, Mr. Yoho currently owns an aggregate of 23,687 shares.
Duke Energy Corp (NYSE:DUK), the largest power company by generation capacity in the United States, has seen the value of its shares increase by 3% since the start of the year. Earlier this month, the company said it anticipated to spend $200 million to repair the damage done to its operations by Hurricane Matthew, with the storm swamping the company’s 2016 storm-repair fund of $40 million. Duke Energy has been cutting its exposure to volatile power prices in wholesale markets and agreed to divest its International Energy business segment in October, excluding a 25% interest in a large regional producer of methyl tertiary butyl ether (MTBE) located in Saudi Arabia. The International Energy segment operates and manages power generation facilities and engages in sales and marketing of electric power, natural gas and natural gas liquids outside the U.S. (predominantly in Latin America). Jim Simons’ Renaissance Technologies LLC was the owner of 3.28 million shares of Duke Energy Corp (NYSE:DUK) at the end of the third quarter.
The next two pages of this article will discuss fresh insider buying and selling at other companies.