Insider buying shows confidence


With radio stocks so badly beaten down, nothing makes the point that a company’s stock is undervalued quite so succinctly as insiders laying down their own money to buy the bargain shares. A couple of radio companies are noteworthy for some heavy insider stock buying of late. Their fate is clearly aligned with that of the other shareholders.

We’ve written several times about how the Dickey family has bought up more and more shares of Cumulus Media, despite having to abandon an effort to take the company private with backing from private equity. That buying continues.

Another founding family is also buying shares of a radio company’s stock. Entercom Founder Joe Field already owned over 8.7 million shares of the company – and because over 6.2 million of those are super-voting Class B shares, he holds voting control of the company. He filed notice with the SEC last month that he and his son, CEO David Field, had decided to buy additional shares of Entercom’s Class A stock.

Since then, both Fields have been active in the market, buying a few hundred or a few thousand shares at a time. As of a December 5th update Joe Field had increased his holdings (including those held by his wife, their trusts and their foundation) to over 8.9 million shares. David Field had increased his stock ownership by over 100,000 shares to more than 3.2 million in total.

Meanwhile, back at Cumulus, Dickey family patriarch Lew Dickey Sr. has continued to buy hundreds of thousands of company shares via his Lewis W. Dickey, Sr. Revocable Trust. As of a December 4th report filed with the SEC, Lew Sr. owned over 6.1 million Class A shares, some 17% of the shares outstanding. The long list of transactions showed him to be in the market day after day buying shares. In one transaction he bought three shares, while other buys were considerably larger, up to 9,802 shares.

Lew Dickey Sr. is the father of company CEO Lew Dickey Jr. and Exec. VP/Co-COO John Dickey. 

RBR/TVBR observation: Projections about how a company is positioned for growth once the US economy turns around are fine. But it is far more impressive to put your money where your mouth is.