(The Kansas City Star posted the following article by Mark Davis on its website on May 13.)
KANSAS CITY, Mo. — Kansas City Southern’s former top officer bought more than $1.6 million worth of the company’s stock last week.
Landon Rowland, who is a director of the Kansas City-based rail company, bought 150,000 shares on May 5. He paid slightly more than $10.96 a share.
Kansas City Southern shares rose 8 cents on Monday and closed at $11.83.
Rowland could not be reached for comment Monday.
His decision to invest $1.64 million in Kansas City Southern came two weeks after the company agreed to acquire Mexico’s largest railway and one other to become Nafta Rail.
Some investors often consider insider stock purchases as favorable signs for a company’s outlook.”Obviously, the size of the purchase is compelling,” said Lon Gerber, director of insider research at Thomson Financial.
Gerber noted other reasons for Rowland’s purchase to stand out among insider transactions.
It was Rowland’s first open market purchase of Kansas City Southern shares, according to Thomson Financial’s records, which date to 1986.
While an officer of the company, Rowland typically received shares as compensation or acquired them through stock options he was granted as compensation. He already owned about 850,000 shares.
Gerber also noted that Rowland bought the shares directly rather than through a trust, limited partnership or some other indirect means. Gerber said indirect buys might have come at the direction of a money manager or involve partners’ money as well as the insider’s money.
“You know they have control over the trade” with direct purchases, Gerber said. “You know it’s their decision.”
Rowland had been chief executive officer of Kansas City Southern from 1987 to July 2000. During his tenure, the company broadened its investments in financial services businesses, which came to dominate the railroad side of Kansas City Southern.
Those businesses spun off as a new public company called Stilwell Financial Inc., and Rowland became its chief executive officer. He retired as Stilwell’s chief at the start of the year, when it moved to Denver and became Janus Capital Group Inc. He remains chairman of Janus Capital.