Massive Clusters of Insider Buying at Synalloy (SYNL) and Providence Service (PRSC), Plus Insider Transactions at 3 Other Companies

Each piece of insider buying activity is worth the attention of the investment community regardless of the number of shares bought by corporate insiders. Even the insider buying conducted by freshly-appointed Board members and executives to meet the stock ownership guidelines imposed by their companies represents a positive indicator. Why? Because the whole purpose of these stock ownership guidelines is to align shareholders’ interests with those of the executive team.

However, retail investors should not blindly mimic each insider purchase. Instead, investors should incorporate insider trading metrics into their investment selection and research process, a practice used by successful hedge fund firms as well. Insider Monkey does not attempt to propagate investment opportunities through our daily insider trading articles, as some might suggest; this is outside our scope. Insider Monkey’s underlying purpose is to help investors and other stock market participants make more informed decisions. Without deviating too much from the purpose of this article, let’s have an in-depth look at a set of noteworthy insider transactions reported with the SEC on Wednesday.

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Cluster of Insider Buying Observed at Struggling U.S. Steel Products Maker

Five different insiders at Synalloy Corporation (NASDAQ:SYNL) purchased some of the company’s stock earlier this week, a massive cluster of insider buying that investors should not overlook. To begin with, J. Kyle Pennington, the President of Synalloy Metals (a subsidiary of the company), purchased 3,800 shares on Tuesday at a price tag of $7.47 each, lifting his overall holding to 33,315 shares. Sarah M. Cunningham, Vice President of Corporate Administration, snapped up 4,000 shares on Wednesday for $7.32 each, which boosted her ownership to 11,458 shares. Chief Financial Officer and Senior Vice President Dennis M. Loughran acquired 10,000 shares on Tuesday at $7.51 apiece. Following the recent purchase, Mr. Loughran currently owns 43,345 shares. Moreover, board member Henry L. Guy snatched up a 20,000-share block on the same day at a cost of $7.45 per share, boosting his stake to 32,209 shares. Last but certainly not least, President and CEO Craig C. Bram purchased 26,500 units of common stock on Tuesday for $7.46 each, which increased his ownership to 161,552 units.

The U.S. steel products maker has seen its market cap jump by 12% since the beginning of the year, but the company has still lost 56% of its market value in the past two years. Synalloy Corporation (NASDAQ:SYNL) posted net sales of $34.91 million for the second quarter, a decrease of $15.26 million year-over-year. Falling nickel prices weighed heavily on stainless steel pipe sales in 2016. Royce & Associates, founded by Chuck Royce, was the owner of 617,533 shares of Synalloy Corporation (NASDAQ:SYNL) at the end of June.

The next two pages of this article will reveal several other noteworthy insider transactions reported with the SEC on Wednesday.

Three Insiders at Healthcare-Focused Holding Company Purchase Shares

Three members of Providence Service Corporation (NASDAQ:PRSC)’s executive team purchased shares last week. To start with, Chief Executive Officer James M. Lindstrom snatched up 2,500 shares on Friday at a price tag of $46.61 each, enlarging his ownership to 26,153 shares. Moreover, David Casey Shackelton, Chief Financial Officer and Senior Vice President, bought 2,000 shares on the same day at prices varying from $46.80 to $46.90 per share. After the recent purchase, Mr. Shackelton currently owns 13,319 shares. Matthey K. Umscheid, Senior Vice President of Strategic Services, acquired a smaller block of 500 shares on Friday for $47.00 each, lifting his stake to 1,250 shares.

The holding company that owns and manages various operating subsidiaries, comprised of providers of critical healthcare and workforce development services, has seen the value of its shares increase by nearly 2% since the start of the year. At the end of August, healthcare-focused private equity firm Frazier Healthcare Partners agreed to acquire a 60% equity interest in health-assessment provider Matrix Medical Network, a subsidiary of Providence Service Corporation (NASDAQ:PRSC). The deal values Matrix at around $537.5 million. Jim Simons’ Renaissance Technologies reported ownership of 915,300 shares of Providence Service Corporation (NASDAQ:PRSC) in its 13F filing for the June quarter.

Board Member at Troubled National Retailer Buys Some Shares

One member of Sears Hometown and Outlet Stores Inc. (NASDAQ:SHOS)’s Board of Directors also purchased some shares earlier this week. Board member William K. Phelan acquired 4,200 shares on Tuesday at prices that fell between $5.97 and $6.00 per share. Following the recent transaction, Mr. Phelan currently owns 11,200 shares.

Sears Holdings Corp (NASDAQ:SHLD) spun-off Sears Hometown and Outlet Stores Inc. (NASDAQ:SHOS) in October 2012, but the latter company’s comparable-store sales have been on a downtrend for three years, as customers associate Sears Hometown and Outlet with store closures and the poor shopping experience at the former parent company’s Sears stores. The national retailer focused on selling home appliances, hardware, tools, and lawn and garden equipment has seen its market cap plunge by 32% since the start of 2016. The company, along with its dealers and franchisees, operated 1,123 stores across all 50 states, plus Puerto Rico and Bermuda at the end of July, after 22 stores were closed in the second quarter. Francis Chou’s Chou Associates Management had 1.32 million shares of Sears Hometown and Outlet Stores Inc. (NASDAQ:SHOS) among its holdings at the end of the April-to-June period.

The final page of the article will discuss the fresh insider selling registered at two other companies.

Former CEO of Growing Provider of Shared Wireless Infrastructure Offloads Shares

One member of Crown Castle International Corp (NYSE:CCI)’s executive management team offloaded a sizable chunk of shares this week, the most voluminous insider sale at CCI in 2016. Executive Vice Chairman W. Benjamin Moreland, President and CEO from July 2008 until May 2016, discarded 50,000 shares on Wednesday at prices ranging from $98.00 to $98.68 per share. After the recent sale, Mr. Moreland currently holds an ownership stake of 533,972 shares.

The largest provider of shared wireless infrastructure in the United States has seen the value of its stock spike by 14% since the beginning of 2016. The real estate investment trust owns, operates and leases shared wireless infrastructure that consists of roughly 40,000 towers and small cells supported by 17,000 miles of fiber. Mobile data usage has been doubling every two years, so Crown Castle International Corp (NYSE:CCI), which leases antenna space to carriers, is well-positioned to provide shareholders with hefty dividend checks for the foreseeable future. CCI currently pays out a quarterly cash dividend of $0.885 per share, which yields 3.58% annually. Ken Griffin’s Citadel Advisors owns 1.93 million shares of Crown Castle International Corp (NYSE:CCI) as of June 30.

Board Member at CST Brands Offloads Shares After Acquisition Announcement

One member of CST Brands Inc. (NYSE:CST)’s Board also unloaded two sizable blocks of shares in the past several days. Director Joseph V. Topper Jr. liquidated 57,729 shares on Friday and 42,271 shares on Tuesday at prices that ranged from $47.90 to $48.02 per share, trimming his ownership to 1.13 million 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 $3.67 billion. Under the terms of the freshly-inked agreement, CST Brands shareholders will receive $48.53 per share in cash for each share of CST Brands owned, yielding an enterprise value of around $4.4 billion including the assumption of net debt. CST Brands Inc. (NYSE:CST) has more than 1,000 stores in the southwestern U.S., as well as in New York and Eastern Canada. There were a total of 31 hedge funds followed by Insider Monkey with long positions in CST Brands at the end of the second quarter, hoarding up 28% of the company’s common stock. Alan Fournier’s Pennant Capital Management had 3.43 million shares of CST Brands Inc. (NYSE:CST) in its portfolio at the end of June.

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