Jun 1, 2016

Posted by in Stock Market News | 0 Comments

Significant Insider Buying Activity: CF Industries Holdings, Inc. (NYSE:CF), Charles Schwab Corp (NYSE:SCHW), Phillips 66 (NYSE:PSX)

Significant Insider Buying Activity: CF Industries Holdings, Inc. (NYSE:CF), Charles Schwab Corp (NYSE:SCHW), Phillips 66 (NYSE:PSX)

“Insider trading” is a term that most investors have heard and usually associate with illegal conduct. But the term actually includes both legal and illegal conduct. The legal version is when corporate insiders—officers, directors, and employees—buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC.

“Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise” (Peter Lynch, one of the greatest investors of all time).

Insiders know their industry, in particular the company they are managing.

Insider trading can be profitable only if securities prices move. Therefore, insiders hoping to trade on inside information may try to get the price to move by cutting the company’s costs, seeking new products, and so on. While such actions benefit the insider, they also benefit the firm’s security holders as a group.

No one invests to lose money, so do corporate insiders. They are prevented from buying and selling their company stock within a six-month period: therefore, insiders buy stock when they feel the company will perform well over the long-term.

Moving on to the first insider trade May 24, 2016 which involved ARZBAECHER ROBERT C, a director at CF Industries Holdings, Inc. (NYSE:CF), who acquired 275 shares at $27.95 per share to put the total holding at 175 shares. Its shares currently owned by company management are 0.30% while institutional investors own about 94.60%. The 6-month change recorded in total insider ownership was 9.39%. On the other side, 3.87% change in total institutional ownership has been reported for the 3-month period.

Charles Schwab Corp (NYSE:SCHW) saw an insider buy stock in the company on May 31. ADAMS JOHN K JR, Director of the company, bought 4,900 shares for $30.61 per share worth a total of $149,984. After this insider buying, ADAMS JOHN K JR now has a total stake of 20,261 shares in the company. Its shares currently owned by company management are 0.10% while institutional investors own about 78.70%. The 6-month change recorded in total insider ownership was -33.34%. On the other side, -1.15% change in total institutional ownership has been reported for the 3-month period.

Phillips 66 (NYSE:PSX) also received some insider trading action as BERKSHIRE HATHAWAY INC, who is the company’s 10% Owner added some 368,021 shares at a price of $79.76 per share to the holding that now comprises of 77,017,648 shares. Its shares currently owned by company management are 0.10% while institutional investors own about 72.60%. On the other side, -0.65% change in total institutional ownership has been reported for the 3-month period.

 

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