Why Are Insiders Getting Rid of These 3 Stocks?

Murphy Oil Corporation (NYSE:MUR) also had one of its insiders sell shares earlier this week. Director Caroline G. Theus reported selling 28,500 shares on Monday at a weighted average price of $18.61, of which 10,500 shares were held by her spouse, while the remaining shares were held jointly with her spouse. The Director also holds a direct ownership stake of 417,357 shares. The international oil and gas company has seen its shares decline by more than 64% over the past year, though as commodities prices could slide even further, the floor may not have yet been reached for the stock.

Murphy Oil reported a net loss of $2.27 billion for 2015, which included non-cash impairments of oil and natural properties equal to $2.49 billion. Let’s try to assess the financial health of the company by looking at its balance sheet, which reveals $2.83 billion of outstanding debt that consists of $2.25 billion of long-term, fixed-rate bonds with a weighted average coupon of 4.07%. The company has cash and liquid invested securities amounting to $456.0 million as of the end of 2015, but also has $600.00 million available on its $2.00 billion revolving credit facility. Meanwhile, Murphy Oil anticipates that its 2016 capital expenditures for operations will reach $825.00 million, which would denote an decrease of 62% relative to the $2.19 billion figure spent last year. There were 27 smart money managers monitored by Insider Monkey that were invested in the oil and gas company at the end of September, with them stockpiling nearly 11% of its shares. Mason Hawkins’ Southeastern Asset Management holds a 6.71 million-share position in Murphy Oil Corporation (NYSE:MUR) as of the end of the third quarter.

Last but not least, Neogen Corporation (NASDAQ:NEOG) had an executive unload shares last week. Terry A. Morrical, Vice President of Animal Safety Operations at Neogen, sold 4,677 units of common stock on Friday at a price of $51.13 per unit and currently holds a stake of 39,583 shares. The shares of the food and animal safety company are up by 12% over the past 12 months and trade at rather expensive P/E ratios. For example, the company has a forward P/E multiple of 41.43, which can partially be justified by the great expectations for the company’s bottom- and top-line growth rates that some investors and analysts have. Bob Mitchell, co-manager of small cap-focused mutual fund Conestoga Small Cap fund, believes that Neogen can generate revenue growth in the low double-digits and register operating income growth in the range of 15% to 20% annually over the next three-to-five years. This seems to justify the company’s high valuation at the moment, but it remains to be seen whether the company will be able to meet Mitchell’s expectations.

Revenue from the company’s Food Safety segment totaled $71.71 million for the six months that ended November 30 and accounted for 46% of total revenue, compared to $63.92 million reported for the segment during the same period of the prior year. At the same time, Animal Safety segment revenue increased to $82.76 million from $72.14 million reported a year earlier. The smart money sentiment towards the stock was very positive in the third quarter, considering that the number of funds with positions in the company grew to 13 from eight quarter-over-quarter. Jim Simons’ Renaissance Technologies owned almost 273,000 shares of Neogen Corporation (NASDAQ:NEOG) at the end of September.

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