What Has Insiders Hoarding Up Shares of These 3 Struggling Companies?

Corrections Corp Of America (NYSE:CXW) also had a high volume of insider buying this week. Director Joseph V. Russell bought 8,679 shares on Tuesday and 1,321 shares on Wednesday at prices in the range of $24.65-to-$24.75 per share. After the recent transactions, the Director owns 248,806 shares. The shares of the largest owner of privatized correctional and detention facilities in the U.S. are 32% in the red year-to-date despite experiencing seemingly strong financial performance. The company generated total revenue of $1.35 billion for the nine-month period that ended September 30, up from $1.22 billion reported in the same period a year ago. Its net income for the first nine months of 2015 totaled $173.3 million, which compares with $165.0 million generated last year. It appears that the U.S. presidential race has put some weight on the stock, which could somewhat explain Corrections’ stock performance. Earlier this year, presidential candidate Bernie Sanders introduced a bill that would ban private prisons, claiming that it is “wrong to profit from the imprisonment of human beings and the suffering of their families and friends”. In the meantime, the company has an attractive valuation at the moment if solely relying on its trailing price-to-earnings ratio of 14.27. Ric Dillon’s Diamond Hill Capital upped its position in Corrections Corp Of America (NYSE:CXW) by 4% during the September quarter to 1.06 million shares.

Lastly, Kansas City Southern (NYSE:KSU) saw its President purchase shares earlier this week. Patrick J. Ottensmeyer purchased 2,500 shares on Wednesday at $76.22 apiece and currently owns 54,497 shares. The financial performance of the railroad operator of north-south routes between Canada and Mexico has been impacted by numerous factors in 2015, including the strengthening of the U.S. dollar against the Mexican peso, depressed energy revenue, and declining frac sand and metals volumes. To be more detailed, the company’s energy revenue for the third quarter dropped 19% year-on-year as a result of lower volumes in utility coal, thanks to the low natural gas prices. At the same time, frac sand and metals volume declined as a result of the declining growth in new U.S. crude drilling operations. The high uncertainty around the energy-related markets and the foreign exchange rates caused the company to withdraw its 2015 revenue and volume guidance, and all this uncertainty seems to be reflected in the company’s stock performance as well. Shares of Kansas City Southern have lost 38% this year and are trading at a trailing P/E ratio of 16.98. Andreas Halvorsen’s Viking Global is the largest equity holder of Kansas City Southern (NYSE:KSU) within our database, owning 3.09 million shares as of September 30.

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