Insider trading behavior should constitute an important piece of data in one’s security analysis process, as past research shows that insider actions tend to offer an accurate reflection of the future prospects of companies, industries or even stock markets in general. Intuitively this makes perfect sense. After all, corporate insiders possess a broad set of skills and characteristics that describe the “value-oriented” type of investors.
Some of these skills and characteristics include: an extensive knowledge and understanding of their companies and industries; the tendency to employ a contrarian approach to investing; and the preponderance to maintain a long term perspective. Hence, insider trading activity, especially insider buying, represents a strong 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 benefits, but there is only one reason they buy – they think the price is going up. Insider Monkey identified a set of noteworthy insider transactions reported with the SEC on Friday – transactions covered throughout the next three pages of this insider trading article.
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Cluster of Insider Buying at Macquarie Infrastructure After Hedgeye Recommends Shorting the Stock
Let’s kick off our discussion by looking at a cluster of insider buying at Macquarie Infrastructure Corp (NYSE:MIC), where five insiders purchased shares last week. To start with, Jay A. Davis, the head of the investor relations team for Macquarie Infrastructure and Real Assets, bought 1,000 shares on Friday at $74.15 apiece, lifting his overall holding to 8,331 shares. General Counsel Michael Kernan purchased a new stake of 1,000 shares on the same day for $74.15 each. Chief Financial Officer Liam Stewart snapped up a 2,500-share block at a price of $74.15 per share, a block held by Jayandell Holdings 1 LLLP. Mr. Stewart also holds a direct ownership stake of 281 shares. Chairman Martin Stanley snatched up 4,000 shares on Friday for $74.15 each, doubling his ownership stake to 8,000 shares. Last but not least, Chief Executive Officer James Hooke bought 15,000 shares on the same day, boosting his holding to 71,576 shares.
As there is a story behind each insider purchase on most occasions, let’s focus our attention on what might have triggered the jump in insider buying at the energy and transportation infrastructure conglomerate. The insider buying discussed above comes after Kevin Kaiser, a managing director at Hedgeye Risk Management, recommended shorting Macquarie Infrastructure Corp (NYSE:MIC), sending the shares plummeting. The shares of Macquarie Infrastructure should be worth $40-to-$50 according to Kaiser, well-known for his past success at identifying short targets. Macquarie Infrastructure’s shares are down 4% year-to-date. Bernard Selz’s Selz Capital LLC reported owning 1.01 million shares of Macquarie Infrastructure Corp (NYSE:MIC) through the latest round of 13Fs.
Let’s head to the next two pages of this article, where you can find noteworthy insider buying and selling at four other companies.