By Ruth Mantell
|Insider Tables : Buyers | Sellers|
A TEXAS BILLIONAIRE has been loading up on shares of NL Industries /zigman2/quotes/210222881/composite NL +8.54% , a company that makes paint pigments and ergonomic computer accessories.
During the past month, Harold Simmons, chairman and chief executive officer of NL Industries, has purchased more than 100,000 shares of the company, according to Securities and Exchange Commission filings.
Following the recent transactions, Simmons owned 191,000 NL Industries shares, and controlled another 40 million through various vehicles, according to an SEC filing.
Earlier this month Market Profile Theorems raised NL Industries to a Buy from a weak Neutral ranking based on Simmons' recent purchases, according to Michael Painchaud, managing director of research for Market Profile Theorems.
"Simmons has been buying quite aggressively," Painchaud says. "So that's a good vote of confidence from our perspective."
NL Industries holds Kronos Worldwide, which makes pigments used in paints, and CompX International, which makes products such as ergonomic computer accessories.
Trading at 15.27, NL Industries stock is about 38% below its 52-week high. Along with some other paint companies, NL Industries is the subject of legal proceedings regarding dangers associated with lead paint, according to news reports.
But the company's legal wranglings don't seem to be discouraging Simmons from buying stock. Painchaud says Simmons' substantial position in the shares is encouraging.
"[Simmons] is a good ally of investors…he swims in their boat, adds to his position and buys at opportune times," Painchaud says.
Painchaud points out that Simmons has an impressive insider trading history: buying shares before they appreciate.
In July, Barron's Online noted that Simmons and his wife, Annette, bought Titanium Metals stock shortly before company officials increased earnings guidance (see Inside Scoop, " Corp. Raider Raises Questions With Trade," July 20). Titanium Metals shares appreciated sharply after the Simmonses bought 130,000 shares.
Jonathan Moreland, director of research at InsiderInsights.com, agrees that Simmons' recent NL Industries purchases are promising.
However, he notes that larger investors may want to steer clear of the stock, which is very closely held.
"There's not a lot of float, and for a large institution, that's a disincentive to get in," Moreland says.
NL Industries officials did not respond to a request for comment.