By Alex Oleinic
Looking at insider purchases can help us find great investment ideas at the right time. Recently five companies have seen several of their insiders buying big chunks of stock. So, let's take a look at these transactions and find out which insiders and hedge funds placed their bets on these companies.
A popular stock choice amongst insiders last week was Herbalife Ltd. (NYSE:HLF). This $4.7 billion market cap global nutrition firm focuses on healthy meals and fitness foods and its stock price attracted three insider purchases on Thursday. The company's Chief Operating Officer, Richard Goudis bought 10,700 common shares for a weighted average purchase price of $55.81 per share, spending nearly $600,000 on the stock. Following his first acquisition of the year, the insider now holds a total of 166,969 company shares. Des Walsh, President of Herbalife, bought 10,000 shares for a weighted average price of $55.67 per share, and the firm's Chief Financial Officer, John Desimone, acquired the same amount of shares, paying $55.56 apiece.
These purchases came after Pershing Square's Bill Ackman failed to convincingly present evidence for Herbalife being a pyramid scheme. Actually Ackman's 3.5 hour presentation led to a 25% increase in the company's stock price - the greatest one- day growth in its history. We should highlight that the aforementioned insider purchases probably impacted this substantial upsurge. Moreover, the stock price lost most of the gained ground; since July 28, when the company announced its second quarter earnings, it lost almost 25%.
While Ackman is betting against the company, and reportedly holds a billion dollar short position, several other hedge funds seem quite confident about its future. This is the case of George Soros' Soros Fund Management, which last declared having boosted its exposure to the firm by 53% and now owns over 4.9 million shares.
AT&T Inc. (NYSE:T)'s Director Glenn Hutchins has recently closed his first stock transaction of the year by buying 100,000 shares for $35.64 apiece. Director Scott Ford was also keen on the $184 billion market cap telecommunication service provider, as he paid $355,900 for 10,000 shares last Monday. After completing his first stock buy of the year, Mr. Ford now owns a total of 66,319 shares of AT&T.
During the first quarter, David E. Shaw's hedge fund reported one of the most significant increases, boosting its stake in AT&T by 187%. Shaw now holds over 5.75 million shares of the company. Moreover, Sander Gerber's Hudson Bay Capital Management started a position in the company with 3.554 million shares as of the end of March.
Also last week, Titan International Inc. (NYSE:TWI) Mark Rachesky, Director and large shareholder of the company acquired a bulk of 490,775 shares for prices ranging between $14.11 and $14.99 per share. The transactions, that took place during the first half of the week, marked the insider's first purchases since April. After spending more than $7 million on the stock, Rachesky owns a total of 6.7 million shares. The $810.9 million market cap, wheels and tire manufacturer also saw its President, Paul Reitz, complete an acquisition of 15,000 shares on Tuesday, paying $14.32 apiece.
Moreover, a few hedge funds significantly increased their bets on the company during the first quarter of 2014. Ken Griffin's Citadel Investment Group increased its exposure to Titan International and held 555,204 shares of the company as of the end of March. Andrew Grossman and Michael Levitt's LG Capital Management also started a position during the first quarter with 345,700 shares.
Government Properties Income Trust (NYSE:GOV), a $1.6 billion market cap real estate investment trust, saw two of its directors acquire shares. Barry Portnoy closed the larger transaction, buying 440,000 Common Shares of Beneficial Interest for a price of $23.50 apiece, while Adam Portnoy purchased 360,000 shares of the same class, for the same price. This is the first stock purchase to be completed by both insiders this quarter.
Furthermore, several hedge funds have been increasing their participation in Government Properties Income Trust. During the first quarter, Joe Huber's Huber Capital Management upped its stake by 8% and owns over 1.59 million shares, as of the end of March.
Simmons First National Corporation (NASDAQ:SFNC)'s Director Robert Shoptaw spent $396,600 on his first acquisition, executed on Tuesday, when he bought 10,000 shares of the company. George Makris, Chairman and CEO at Simmons First National Corporation, purchased a smaller amount of 5,000 shares, paying $38.88 apiece and following his first transaction this year, he now owns 74,433 shares of the company.
The first quarter at Simmons First National Corporation was marked by new shareholders, such as Anton Schutz's Mendon Capital Advisors, which acquired 25,000 shares in March, worth approximately $932,000.
Disclosure: The author is long T.
Business relationship disclosure: This article is written by Alex Oleinic and edited by Meena Krishnamsetty. Meena has a long position in T. Insider Monkey didn't receive any compensation (other than from Seeking Alpha) to write this article.