Karn Robert B III: insider trades

Director at Peabody Energy Corp. 1 open-market purchase and 4 sales not made under a pre-set plan, reported from February 18, 2010 to October 28, 2014.

Would copying Karn Robert B III’s purchases have beaten the S&P 500?

Too few purchases to judge. None of their purchases has 12 months of prices after the report; we judge insiders once they have 20. The figures below can swing a long way on a handful of trades. None of their purchases could be priced, so there is no copy portfolio. None of these trades can be measured yet: either the window after the report has not finished or the share price was under $5 when it was reported.

With 296 insiders tested, some will look skilled or unskilled by chance alone: when we replaced each insider’s stocks with random companies bought on the same days, about 5.7 cleared the bar ahead and 23.3 behind. One record on its own proves little.

Trade by trade

Karn Robert B III: trades against the S&P 500 afterwards
Measured	Average vs S&P 500	Median	Went the right way	Years	t-statistic	p-value	Evidence
Purchases, 3 months after the report	—	—	—	—	—	—	Not enough years
Purchases, 6 months after the report	—	—	—	—	—	—	Not enough years
Purchases, 12 months after the report	—	—	—	—	—	—	Not enough years
Purchases, 12 months after the trade	—	—	—	—	—	—	Not enough years
Sales, 3 months after the report	—	—	—	—	—	—	Not enough years
Sales, 12 months after the report	—	—	—	—	—	—	Not enough years
Sales, 12 months after the trade	—	—	—	—	—	—	Not enough years

“Average vs S&P 500” is the stock’s return including dividends minus the index’s over the same dates, from the close on the first trading day after the report, or from the close on the trade date. Only windows that have finished are counted. For sales, a negative figure means the stock lagged after it was sold, so selling was the right call (green). “Went the right way” is the share of purchases that beat the index, or of sales that trailed it. The t-statistic uses one average per year of reports, because one person’s trades bunch into the same stock and weeks, and needs trades in at least four different years; the p-value comes from the t distribution with that number of years (with four years, a t of 2 has p = 0.14). “Some evidence” means p under 5%, “strong evidence” p under 1% over at least six years.

Companies traded

Company	Title on the latest filing	Purchases	Sales	First report	Latest report
Peabody Energy Corp BTU	—	1	4	February 18, 2010	October 28, 2014

Trades and what followed

Moves are against the S&P 500; green means the trade went the insider’s way.

Reported	Traded	Company	Trade	Value	3 months after report	12 months after report	12 months after trade
October 28, 2014	October 24, 2014	BTU	Purchase	$93,150	not yet	not yet	not yet
February 11, 2014	February 10, 2014	BTU	Sale	$37,151	not yet	not yet	not yet
March 21, 2011	March 18, 2011	BTU	Sale	$316,260	not yet	not yet	not yet
November 18, 2010	November 17, 2010	BTU	Sale	$672,507	not yet	not yet	not yet
February 18, 2010	February 16, 2010	BTU	Sale	$172,184	not yet	not yet	not yet

Open-market purchases and sales of at least $10,000 in companies we cover, from SEC Form 4 filings; sales made under a pre-set Rule 10b5-1 plan are not shown. “Not yet” means the window has not finished or the share price was under $5 at entry. These are the shares’ moves after each trade: they say nothing about why Karn Robert B III traded and do not suggest the use of non-public information. How every insider compares · the insider trading backtest.