Put Oxford Industries Back on the Rack

On Dec. 31, Oxford Industries (OXM) board member John Holder bought 1,000 company shares of at an average price of $45.93. According to a filing with the Securities and Exchange Commission, Holder now owns a just under 13,000 shares of the apparel maker's stock directly, so this was a moderate percentage increase in his position. That same day Holder bought shares of Genuine Parts (GPC), where he is also a board member.

It would be easy to say that this insider is merely buying companies where he serves on the board, but this would be irrational. Holder already has economic ties to Oxford, for example, and already benefits from or is harmed by changes in its performance. It makes sense for him to diversify his investments. The general exception would be if an insider such as Holder is particularly confident in these companies, in which case the potential upside would overcome the benefits of diversification; this is why stocks bought by insiders tend to beat the market. However, there was significant insider selling at Oxford in the fourth quarter of 2012; while insider sales aren't generally as informative as insider purchases, for diversification reasons, it is still something to note. Perhaps this insider purchase is the product of casual decision making after all, and shouldn't be taken as a bullish signal....330 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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