Ottley Properties, LLC: insider trades

Director, 10% owner at CKX Lands, Inc. 23 open-market purchases and no sales not made under a pre-set plan, reported from October 20, 2011 to May 21, 2018.

Would copying Ottley Properties, LLC’s purchases have beaten the S&P 500?

Buying each purchase the day after it was reported, an equal amount each, and holding it 12 months or until they reported a sale would have turned $10,000 on October 21, 2011 into $10,316 by November 2, 2026, +0.2% a year. The copy held shares only 42% of the time, so the fair comparison is the S&P 500 on those same days with Treasury bills otherwise: $28,962, +7.3% a year (the S&P 500 held throughout made $79,238, +14.8% a year). Beta against the index was 0.06. Twelve months after each report, the average purchase was −12.6% against the S&P 500 (median −10.3%), and 17% beat it: a gap unlikely to be luck alone (p = 0.008 over 7 years). Measured from the trade date, the insider’s own timing, the average was −11.3%.

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.

Copying Ottley Properties, LLCS&P 500, same days investedS&P 500, held throughout $10,000 copying Ottley Properties, LLC’s open-market purchases from October 21, 2011, before costs and taxes, marked weekly. Each purchase gets the same starting stake, bought at the close of the first trading day after the report and sold 12 months later or the day after a reported sale of that stock; uninvested money earns the Treasury bill rate. “Same days invested” holds the S&P 500 only on the days the copy held shares, Treasury bills otherwise.

Return a year, copying: +0.2%
S&P 500, same days invested: +7.3% (held throughout +14.8%)
Time in shares: 42%
Sharpe ratio (S&P 500): 0.05 (0.81)
Biggest drop (S&P 500): −48% (−34%)
Market sensitivity (beta): 0.06
Purchases copied: 23

Trade by trade

Ottley Properties, LLC: trades against the S&P 500 afterwards
Measured	Trades counted	Average vs S&P 500	Median	Went the right way	Years	t-statistic	p-value	Evidence
Purchases, 3 months after the report	23	−5.9%	−7.8%	22%	7	−3.41	0.014	Some evidence: behind
Purchases, 6 months after the report	23	−6.0%	−7.3%	26%	7	−2.26	0.065	No reliable evidence
Purchases, 12 months after the report	23	−12.6%	−10.3%	17%	7	−3.92	0.008	Strong evidence: behind
Purchases, 12 months after the trade	23	−11.3%	−7.2%	26%	7	−3.81	0.009	Strong evidence: behind
Sales, 3 months after the report	0	—	—	—	—	—	—	Not enough years
Sales, 12 months after the report	0	—	—	—	—	—	—	Not enough years
Sales, 12 months after the trade	0	—	—	—	—	—	—	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
CKX Lands, Inc. CKX	—	23	0	October 20, 2011	May 21, 2018

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
May 21, 2018	May 18, 2018	CKX	Purchase	$20,568	−7.9%	−10.3%	−12.5%
November 28, 2016	November 23, 2016	CKX	Purchase	$50,835	−4.8%	−24.2%	−23.2%
March 10, 2015	March 9, 2015	CKX	Purchase	$16,655	+2.8%	−32.9%	−30.5%
February 26, 2015	February 25, 2015	CKX	Purchase	$81,830	−0.9%	−32.7%	−30.9%
October 14, 2014	October 9, 2014	CKX	Purchase	$74,260	−11.9%	−38.8%	−30.9%
April 8, 2014	April 8, 2014	CKX	Purchase	$272,415	+5.8%	−14.8%	−17.3%
January 14, 2014	January 10, 2014	CKX	Purchase	$32,174	−0.7%	−5.7%	−3.0%
November 21, 2013	November 20, 2013	CKX	Purchase	$107,250	+0.4%	−2.2%	−7.2%
September 26, 2013	September 25, 2013	CKX	Purchase	$38,718	−8.3%	−6.9%	−2.2%
September 23, 2013	September 20, 2013	CKX	Purchase	$33,991	−8.4%	−3.8%	−4.5%
January 10, 2013	January 9, 2013	CKX	Purchase	$58,758	−3.3%	−19.6%	−25.8%
January 4, 2013	January 3, 2013	CKX	Purchase	$140,237	−3.8%	−19.2%	−19.0%
December 3, 2012	November 30, 2012	CKX	Purchase	$65,800	−11.6%	−25.4%	−26.0%
November 8, 2012	November 6, 2012	CKX	Purchase	$35,000	+4.8%	−19.8%	−21.0%
July 16, 2012	July 13, 2012	CKX	Purchase	$70,453	−22.2%	−31.9%	−24.4%
June 20, 2012	June 19, 2012	CKX	Purchase	$13,880	−9.6%	−11.0%	−6.9%
April 2, 2012	March 29, 2012	CKX	Purchase	$12,700	+12.7%	+2.6%	+6.1%
December 20, 2011	December 19, 2011	CKX	Purchase	$11,200	−7.8%	−4.4%	+5.3%
November 25, 2011	November 22, 2011	CKX	Purchase	$14,924	−12.8%	−0.6%	+5.1%
November 16, 2011	November 15, 2011	CKX	Purchase	$10,800	−15.3%	+0.1%	+5.5%
November 10, 2011	November 10, 2011	CKX	Purchase	$43,992	−11.4%	+11.0%	+7.4%
October 28, 2011	October 27, 2011	CKX	Purchase	$72,000	−14.3%	−3.6%	+2.8%
October 20, 2011	October 19, 2011	CKX	Purchase	$35,610	−6.6%	+3.5%	−6.3%

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 Ottley Properties, LLC traded and do not suggest the use of non-public information. How every insider compares · the insider trading backtest.