Tanker firm insiders buy $10.4 mln in stock

Four insiders of tanker company Overseas Shipholding Group Inc. (NYSE:OSG) purchased a total of $10.4 million in shares recently as the stock dropped to a two-year low.


Chief Executive Morten Arntzen, Chairman Michael Zimmerman and two directors at the New York company increased their holdings during the past month after the stock fell to $24.83 on June 3. These were the first purchases from Arntzen and Zimmerman in seven years, boosting their holdings in the company by 4.5% and 80%, respectively.
The purchases were seen as a positive sign for the company, given the shipping industry has been under pressure as ships ordered before the 2008 financial crisis come online. The sector has been sideswiped by low demand because of the slow economic recovery, while recent increases in North American oil production have reduced the number of trips on tankers' most profitable Mideast route.
"The fundamentals overhanging the shipping industry are really quite gruesome," said Jonathan Moreland, director of research at Insiderinsights.com.
Moreland called the purchases by OSG insiders "a very significant positive" for the stock. However, given the industry's tough environment, he believes investors need to hold on to the stock for three to five years.
Calls to the company and the insiders who recently bought shares weren't returned.
OSG's stock price has bounced up and down during the past month and is down 27% this year. Shares gave up nearly 5% on Thursday after the International Energy Agency said it will release 60 million barrels of oil from members' emergency stocks to offset production lost to unrest in Libya, a move that punished energy stocks.
The stock was down 1.7% to $26.30 in recent trading Friday.
During last month's stock purchases, Arntzen paid an average of $26.55 a share for 3,987 shares June 7. Zimmerman bought 4,000 shares for an average of $25.05 each June 3.
The two executives spent far less than directors Oudi Recanati and Charles Fribourg, whose purchases account for the vast bulk of the recent insider buying spree. Recanati bought 210,298 shares at an average of $25.62 between May 24 and June 15, while Fribourg snapped up 184,121 shares at an average $25.87 during the same time period.
OSG, which operates 109 vessels under U.S. and international flags, last month reported a first-quarter loss of $1.15 a share, which was better than analysts' forecasts.
Source: MarketWatch