Why Are Insiders Ditching Shares Of These Companies?

We turn our attention to oil and gas exploration, development, and production company Ring Energy Inc. (NYSEMKT:REI). President and Director David A. Fowler unloaded a 13,000-share chunk of stock on Wednesday at $10.26 apiece. After the recent sale, the President holds exactly 102,000 units of common stock. Surprisingly, Ring Energy Inc. (NYSEMKT:REI)’s stock is nearly 2% in the green year-to-date, whereas the oil and gas drilling and exploration industry has lost more than 25% on aggregate since the beginning of the year. The company’s second quarter earnings report was well received by the market even though its oil and gas revenues decreased to $8.98 million from $11.20 million year-over-year. Ring Energy’s net income also declined to $534,167, compared to $2.82 million a year ago. However, it appears that market participants had previously anticipated even worse figures. All-in-all, it is no surprise that the President is selling shares at this point in time, when the company’s stock is greatly outperforming its industry peers. David Zusman’s Talara Capital Management reported owning roughly 892,000 shares in Ring Energy Inc. (NYSEMKT:REI) through its 13F filing for the June quarter.

Finally, we will take a look at the insider trading activity at First Defiance Financial (NASDAQ:FDEF). Chairman William J. Small reported the sale of 1,250 shares on Thursday at prices ranging from $36.41-to-$36.66, all of which were held by a trust fund. After the recent transaction, the Chairman holds a direct ownership stake of 51,544 shares, along with an additional 49,490 share held indirectly through the aforementioned trust fund. It is important to note two features related to this insider selling activity; firstly, the shares of the holding company for First Federal Bank of the Midwest are nearly 12% in the green year-to-date. Secondly, First Defiance Financial (NASDAQ:FDEF) is set to release its third quarter earnings report today, October 19, after the market closes. Therefore, it remains to be seen whether the recent insider selling activity is somewhat related to the upcoming earnings release, which is highly unlikely considering insider trading regulations. Jim Simons’ Renaissance Technologies represents the largest stockholder of First Defiance Financial (NASDAQ:FDEF) within our database, holding almost 204,000 shares as of June 30.

Disclosure: None