Colin Reed, the CEO of Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), directly acquired 20,000 shares of the company’s stock on June 10th at an average price of $34.27 per share, according to a filing with the SEC. This gives him a total of nearly 660,000 shares held directly with more owned by associated family trusts. Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) is a $1.9 billion market cap real estate investment trust which has two segments: one which owns several resorts and convention centers, and one which operates a number of tourist attractions in the Nashville, Tennessee area. We track insider purchases because economic theory holds that insiders should tend to avoid buying shares unless they are more confident than usual in the company, preferring to diversify their wealth in other cases. In fact, studies do show a small outperformance effect for stocks bought by insiders on average (learn more about studies on insider trading).
As a real estate investment trust, Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) receives favorable tax treatment conditional on distributing a large share of its taxable income to shareholders. At many REITs this results in high dividend yields and Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) is no exception to this rule. Currently the company makes quarterly payments of 50 cents per share, making for an annual yield of 5.5%. Last quarter the hospitality segment experienced 7% lower revenue than in the first quarter of 2012, with operating income dropping by over 40% as total operating costs were about flat; the attractions segment reported an operating loss as it saw lower sales and higher costs. As a result even with the high yield we would be wary of the health of Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP)’s underlying business.
In addition to insider trading activity, we also track quarterly 13F filings from hundreds of hedge funds and other notable investors. We’ve found that the information in 13Fs can be used to help develop investing strategies (for example, the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year) and can also track interest in individual stocks. We can see that billionaire John Paulson’s Paulson & Co. reported a position of 2.2 million shares in Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) as of the end of March (see Paulson’s stock picks). JANA Partners, managed by Barry Rosenstein, disclosed ownership of 2.8 million shares in its 13F (find Rosenstein’s favorite stocks).