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Mild Insider Buying at Three Beleaguered U.S. Companies Ahead of ‘Brexit’

Although this article will solely discuss recent insider buying activity registered at several U.S. publicly traded companies, I could not stop myself from mentioning briefly the United Kingdom’s historic decision to leave the European Union. The next question that comes to my mind at the time of writing is whether the European Union is indeed on the “verge of collapse” as billionaire George Soros warned earlier this year. A quick answer would be: It might! There is strong sentiment within the EU that Sweden could be the next country to leave the economic and political bloc, so there is high uncertainty in financial markets across the globe following Britain’s exit from the EU.

Leaving this discussion aside, the following article will discuss some mild insider buying registered at several companies earlier this week. Specifically, Insider Monkey processed most Form 4 filings submitted with the SEC on Thursday and identified those companies with the most noteworthy insider buying. But why would anyone care to track insider buying amid so much uncertainty in financial markets? Investors should keep in mind that insider trading metrics are mostly suitable for long-term-oriented investors, so short term volatility isn’t likely to have an impact on what insider buying conveys.

Through extensive research, we have determined that the due diligence that the investors in our database employ, as well as their long-term focus makes them perfect targets to emulate. However, the results of our analysis have also shown that the small-cap picks of these funds can generate much better returns, with the 15 most popular small-cap stocks beating the market by an average of 95 basis points per month (read more details here).

Wall Street Bull

Wall Street Bull

Real Estate Brokerage Giant Registers Insider Buying amid Poor Stock Performance

Let’s kick off our discussion by having a look at the recent insider buying registered at Jones Lang LaSalle Inc. (NYSE:JLL). Board member Samuel A. Di Piazza Jr. purchased 2,200 shares on Tuesday for $112 each, lifting his overall ownership to 2,763 shares.

The real estate brokerage giant has seen its market value plummet by 26% since the beginning of 2016, partially due to investor worries over a slowing commercial real estate market. The massive plunge has pushed the stock to seemingly attractive levels as Jones Lang LaSalle shares are currently changing hands at around 11.1-times expected earnings, well below the forward PE multiple of 16.5 for the S&P 500 Index and below the company’s 10-year average of roughly 15. Jones Lang LaSalle Inc. (NYSE:JLL) has engaged in a series of acquisitions lately to expand its business operations. For instance, the real estate services firm acquired Merritt & Harris Inc., a provider of construction-related consulting services for real estate lenders and investors, in early June. The company also inked an agreement to acquire Integral UK Ltd., a provider of mechanical and electrical property maintenance in the U.K., in an attempt to become a leading mobile engineering services provider for property on a global basis.

The number of asset managers followed by Insider Monkey with stakes in Jones Lang LaSalle declined to 28 from 31 during the first quarter of 2016. Those 28 money managers accumulated nearly 12% of the company’s outstanding common stock. John W. Rogers’ Ariel Investment upped its stake in Jones Lang LaSalle Inc. (NYSE:JLL) by 29% during the March quarter to 1.45 million shares.

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The next page of this article will reveal the insider buying registered at two other companies.

Tax Preparation Services Firm Sees Board Member Buy Shares

Liberty Tax Inc. (NASDAQ:TAX) also had a member of its boardroom buy some shares earlier this week. Director Robert M. Howard snatched up 1,000 Class A shares on Tuesday at $12.25 apiece. After the recent purchase, Mr. Howard currently owns 26,000 Class A Liberty Tax shares.

The mild insider buying comes shortly after the tax preparation services firm released its financial results for fiscal year 2016 that ended April 30. Liberty Tax Inc. (NASDAQ:TAX)’s revenue in fiscal 2016 was $173.43 million, up from $162.17 million recorded for the previous fiscal year. The company has been receiving dividends from its SiempreTax+ initiative, which is said to be one of the fastest growing tax preparation franchises. SiempreTax+, operating 144 offices during the 2016 tax season versus 57 during the 2015 season, specializes in tax return preparation for individuals and small businesses in the Hispanic market. Meanwhile, the number of customers served in company-owned and operated franchise offices declined by 3.8% to 2.16 million. Liberty Tax’s bottom line increased to $1.38 per diluted share from a much lower figure of $0.61 recorded a year ago.

Earlier this month, Liberty Tax’s boardroom approved a quarterly dividend of $0.16 per share, which yields an impressive 4.74% annually. There were four hedge funds tracked by our team invested in the company at the end of March, as compared to five registered at the end of December. The company’s stock is down 43% year-to-date. Royce & Associates, founded by Chuck Royce, was the owner of 700,128 shares of Liberty Tax Inc. (NASDAQ:TAX) at the end of the March quarter.

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LPG Shipping Company Has Executives Pile Up Some Shares

Dorian LPG Ltd (NYSE:LPG) is yet another company registering insider buying ahead of the U.K.’s historic decision to leave the European Union. Alexander C. Hadjipateras, Executive Vice President of Business Development of Dorian LPG (USA) LLC, snapped up 3,000 shares on Thursday at a price tag of $7.22 per share, boosting his overall stake to 50,998 shares.

The liquefied petroleum gas (LPG) shipping company has seen its market capitalization plunge by 38% thus far in 2016. Dorian LPG Ltd (NYSE:LPG) owns and operates 22 large gas carriers, known as VLGCs, with each having a cargo-carrying capacity of more than 80,000 cubic meters. The company’s revenues for the year that ended March 31 were $289.2 million, a massive increase of $185.1 million relative to the previous year. The increase was mainly driven by $162.2 million additional revenues contributed by 16 newbuilding VLGCs delivered since the end of March of 2015. Meanwhile, the company’s bottom line increased to $129.69 million from a mere $25.26 million recorded a year ago.

The weaker-than-anticipated conditions in the liquefied petroleum gas shipping market has pushed Dorian’s forward PE multiple to only 6.6, meaningfully below the ratio of 16.5 for the S&P 500 gauge. Nine hedge funds from our system had equity investments in Dorian at the end of March, amassing 20% of the company’s total number of outstanding shares. Michael Lowenstein’s Kensico Capital had 8.01 million shares of Dorian LPG Ltd (NYSE:LPG) among its holdings on March 31.

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