Often times, the reasons’ insiders buy their stocks are not readily apparent. Take the case of Vocus, a social media marketing platform company. Admittedly their product offering is really sexy and provides the first dashboard reasonably priced to manage small to even large company’s social and web marketing efforts. Yet in February 2012, the company payed an enormous amount for iContact, an email list management company. The back of the envelope calculation is they payed over $2000 per subscriber which was a grossly negligent price to pay. The market punished the stock dropping it 40% in value that same day. The way the Company financed the transaction is especially troubling. They issued a convertible stock they may force them to come up with over $70 million in 2014 if there stock is still trading at these levels. Maybe the CEO Rudman knows how he is going to deal with this problem. It would be nice if Mr. Rudman can share this with the shareholders. How else can you explain his 70,000 share purchase on 2-28 for $ 1 million or his similar sized 70,000 purchase on 11/18/2012 at $15.31 Granted he has sold millions of dollars more at higher prices but this is an outsized give back for any CEO unless he has something up his sleeve. If your social marketing tools pick this up, please let the world know.
The other purchase is Murphy Oil. The Chairman of the Board Emeritus or some other nebulous title, Clairborne Deming has added 100,000 shares at around $60.50 to his already enormous holdings of over 2.5 million shares. It’s not exactly like he needs more. The company is aggressively expanding their retail fleet of stations at Walmart. They intend to spin this off later this year. Spin-offs are great. Peter Lynch loved them. Why then is Wall Street so neutral about Murphy Oil? 10 analysts rate it a hold (street talk for sell and only 3 rate it a buy).