Each week I highlight large CEO purchases made on the open market. The idea is that these purchases may portend good things for the company, since the CEO is putting his/her money and, sometimes, credibility on the line with a major purchase. Stock options are one thing, and don’t mean anything in regards to the future share price. But open market purchases are different. A CEO would only make an open market purchase if he/she thought the company shares were undervalued, or if the CEO wants you to think that. Use this list as a starting point for research.
This past week there have been a number of purchases even larger than that, so I’m looking at CEO buys of at least $200,000. For the list of eight stocks, please see below.
Rentrak (RENT): CEO Bill Livek made three recent purchases, picking up 1,600 shares on March 11, 895 shares on March 15, and 9,105 shares on March 16. These purchases totaled $268,400. Rentrak is a media measurement and research company based in Portland, OR. Shares have dropped over the last week with the overall market and are down from $30 in early February to $23 currently.
BGC Partners (BGCP): CEO Howard Lutnick also made multiple recent purchases of his company stock. He bought 4,044 shares on March 11 and 53,300 shares on March 16. These purchases totaled $498,056. BGC Partners offers brokerage services for products such as fixed income, foreign exchange, credit and equity derivatives, and futures.
Unilife (UNIS): Unilife is a $1.8 billion market cap medical device company focusing on retractable syringes. CEO Alan Shortall is extremely bullish on the stock, and bought about $500,000 worth of stock on March 16.
Shortall made the following statement along with his purchase, "I am very pleased with the company's recent progress, and our ability to continue to deliver upon our key business milestones. However, I do not believe that our current strong business position is adequately reflected in the valuation of Unilife's shares. Consequently, I have chosen to increase my personal investment in Unilife in an effort to take advantage of this valuation gap. Furthermore, as the opportunity arises, I expect to further accumulate shares in Unilife over the coming months."
Deer Consumer Products (DEER): Even more bullish than Shortall is Deer CEO He Ying. Ying made purchases on March 14 and March 15 totaling 250,000 shares. These purchases totaled $2.75 million. Deer is a Chinese small kitchen appliance maker. There was a negative article written about Deer on Seeking Alpha recently, and I encourage you to take a look at it before deciding to invest.
Bank of New York Mellon (BK): Bank of New York Mellon is an extremely well-run bank that still trades at a very low P/B ration compared to its history. Bank dividend announcements are expected to come this Monday, and analysts believe Bank of New York Mellon will announce an increase in its dividend or a share buyback program. With CEO Robert Kelly’s stock purchase, he is telling you that no matter what the company announces, it will be positive. He bought $289,000 worth of company shares on March 14 and now owns 704,400 shares in all.
Hawaiian Electric Industries (HE): Hawaiian Electric Industries supplies power to 95% of Hawaii’s people, and also runs one of Hawaii’s largest banks, American Savings Bank. Richard Wacker is the president and CEO of American Savings Bank. He’s one of three company CEOs, the others leading Hawaiian Electric Company and Hawaiian Electric Industries. Wacker bought $244,500 of company stock on March 10. The stock is currently yielding 5.1%.
Solar Senior Capital (SUNS): This transaction just showed up recently despite the IPO being on March 2. A few insiders participated in the IPO and Gross bought another 500,000 shares for his investment company, Solar Senior Capital Investors, in a private placement immediately after the IPO. The IPO raised $160 million and the company will use the proceeds to make investments in junk bonds.
Spartech Corp. (SEH): CEO Victoria Holt bought 36,300 shares on March 11 and now owns more than 250,000 shares. Spartech is a leading producer of plastic products and specialty compounds. The stock is near 52 week lows.