CEO Sells Warrior Met Coal 100,000 Shares Worth $10 Million

This Alabama-based coal exporter reported significant insider selling amid a year of strong share price gains.

Walter J. Scheller, Chief Executive Officer of Warrior Met Coal (NYSE:HCC), executed an open-market sale of 100,000 directly held shares on Jan. 12, as disclosed in this SEC Form 4 filing.

Transaction summary

Transaction value based on SEC Form 4 reported price ($100.31); post-transaction value based on Jan. 12 market close ($100.20).

Key questions

• How significant was the sale in the context of Scheller's overall holdings?
  The 100,000 shares sold constituted 25.4% of his direct holdings.
• Were indirect holdings or affiliated entities involved in this transaction?
  No; all shares sold were directly owned by Scheller with no indirect (trust or LLC) entities participating.
• What was the market context and rationale for execution timing?
  The sale was executed at a weighted average price around $100.31, closely in line with the Jan. 12 market close of $100.20.

Company overview

Note: 1-year price change calculated as of Jan. 12.

Company snapshot

Warrior Met Coal is a leading U.S.-based producer of high-quality metallurgical coal, supplying global steelmakers from its operations in Alabama. The company leverages its strategic export focus and established customer relationships to maintain a competitive position in the international steel supply chain.

• Produces and exports non-thermal metallurgical coal, primarily for use in steel production; it also sells natural gas as a byproduct.
• Generates revenue through the extraction and sale of metallurgical coal from two underground mines in Alabama, with a focus on export markets.
• Serves blast furnace steel producers, mainly in Europe, South America, and Asia.

What this transaction means for investors

Warrior Met Coal’s CEO, Walter Scheller, recently sold a significant amount of stock. His 100,000 share sale represented about one-quarter of his holdings.

However, the transaction was executed via his 10b5-1 trading plan. That means the transaction was done on a prearranged schedule rather than opportunistically. That means investors shouldn’t read anything into the sale about the executive’s confidence in Warrior Met Coal’s prospects.

Another executive, Chief Administrative Officer Kelli Gant, recently sold 10,000 shares. This reduced the executive’s stake to 70,580 shares. These were also done under a 10b5-1 plan, however.

Back in November, Brian Chopin, chief accounting officer, sold 2,083 shares, or 9.5% of his stake. These were done outside of a prearranged plan, although a single executive’s sale isn’t concerning.

The executives did profit from the stock’s strong performance. Warrior Met Coal’s shares produced a total return of 79.5% over the last year (through Jan. 16), easily besting the S&P 500 Index’s 17.2%.

Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.