These five CEOs didn’t sell in May and go away. Instead, as the days ticked down to Memorial Day, they bought shares in their companies.
The top executives of Macy’s (ticker: M), Continental Resources (CLR), Bunge (BG), CenturyLink (CTL) and Cognizant Technology Solutions (CTSH) plunked down cash to buy shares on the open market. All five stocks are in the red for 2019.
Buying stock is one lever executives can pull to show confidence in a lagging stock. While such purchases may be a bit of a performance, there is something satisfying as an investor to see a CEO laying down cash, as opposed to using options to buy at a discount.
CenturyLink’s CEO said the purchase highlights his belief in the business. The remaining companies either declined to make their executives available to comment or didn’t respond to requests.
Macy’s stock has tumbled 29.4% year to date through Friday’s close, wiping out last year’s 18.2% rise. The retailer’s shares still haven’t recovered since plunging in January, when Macy’s reported disappointing November and December same-store sales.
CEO Jeffrey Gennette paid $109,785 on May 16 for 5,000 Macy’s shares, an average per-share price of $21.96. Gennette now owns 104,053 Macy’s shares in his personal account and an additional 3,828 shares through a 401(k) plan, according to a form he filed with the Securities and Exchange Commission. He last purchased stock in April 2018 when he paid $291,000 for 10,000 shares, an average per-share price of $29.10.
Continental Resources stock slid 24.1% in 2018, and so far in 2019, it is down another 4.3%. But Chairman and CEO Harold G. Hamm seems to expect a turnaround. He knows the oil producer better than anyone else: Hamm founded Continental Resources in 1967 and has been its only CEO.
He paid $4.0 million on May 16 for 93,000 Continental Resources shares, an average per-share price of $42.71. Hamm now owns 3.5 million shares in a personal account, an additional 64,452 shares through an investment entity, and a further 283.1 million shares through a trust. He last purchased stock in March, paying $34 million for 791,828 Continental Resources shares, an average per-share price of $42.95.
Bunge CEO Gregory Heckman got a two-for-one deal when he paid $2 million on May 21 for 38,588 shares, an average per-share price of $51.93. He received an additional 38,588 shares of the agribusiness giant through his employment agreement, which provided that he receive a one-time award of an additional $2 million of shares when he purchased $2 million in stock. Heckman was named Bunge’s CEO in April. Heckman now owns 93,642 Bunge shares. The company’s stock is down 5.4% so far this year, following last year’s 20.3% drop.
CenturyLink stock is having the toughest time of the bunch in 2019. It is down 33.3% year to date, after a 9.2% drop in 2018. Delayed regulatory filings and executive turnover have eroded investors’ confidence in the wireline telecommunications company.
CenturyLink President and CEO Jeff Storey made his second big purchase of shares this year, paying $491,480 on May 23 for 50,000 shares, an average per-share price of $9.83. He now owns 3.24 million CenturyLink shares in a personal account and an additional 5,654 shares in a 401(k) account.
“I believe in the strength of our company,” Storey said in a statement that CenturyLink provided to Barron’s. “We operate one of the world’s largest, most advanced fiber networks and I have a strong conviction that we are doing the right things to create long-term shareholder value. My continued investment, through stock purchases, represents my belief in the value of the business.”
“I believe in the strngth of our company,” Storey said in a statement that CenturyLink provided to Barron’s. “We operate one of the world’s largest, most advanced fiber networks and I have a strong conviction that we are doing the right things to create long-term shareholder value. My continued investment, through stock purchases, represents my belief in the value of the business.”
Cognizant stock tumbled earlier this month after the information-technology outsourcer lowered its financial forecasts. The shares are down 3.5% year to date, following a 10.6% drop in 2018. CEO Brian Humphries, who was named to the post April 1, made his first open-market stock purchase just ahead of the long weekend. He paid $1.2 million on May 23 for 19,000 shares, an average per-share price of $61.09. The shares Humphries purchased now represent his total holdings in Cognizant stock.