Radio Execs’ Stock Buying May Mean End of Industry Slump

Radio company executives have been on a buying spree of their own stocks in recent months, a sign that the precipitous decline of radio industry stocks over the last year may have finally hit bottom.

Officers of Camarillo-based Salem Communications Corp. bought about $4.2 million worth of stock in the religious radio broadcaster in November after the shares fell more than 50% from their 52-week high in January.

Other radio company insiders bought stock in recent months, including executives at Citadel Communications Corp. and Westwood One Inc. Investors often watch insider buying and selling for clues about how management expects a company to fare.

Radio stocks were battered last year because of a slowing economy, caused in part by higher interest rates, and the collapse of advertising spending by Internet-related companies. The 12-member Bloomberg broadcasting and cable radio stock index fell 51% last year.

“It’s only when the expectations of the street are outside of the expectations of the people running the company that you have this type of thing going on,” said David Coleman, editor of Vickers Weekly Insider Report.

Salem President and Chief Executive Edward Atsinger led the buying, purchasing 229,000 shares at $10.13 each in late November, according to the Washington Service, which tracks executive buying and selling.

Salem Chairman Stuart Epperson bought 150,000 shares at $11.19 each in November, and Chief Financial Officer David Evans purchased 1,800 shares in November.

Citadel Chairman and Chief Executive Lawrence Wilson purchased 117,000 shares from September through November. Citadel director Robert Fuller bought 30,750 shares from September through November, and Vice President Kenneth Maness bought 20,000 shares in November. Shares of Las Vegas-based Citadel fell 82% last year.

Meanwhile, insiders at New York-based Westwood One purchased 186,000 shares from the end of September to the end of October for $16.63 to $20.88, or a total of about $3.5 million. Westwood One Chief Financial Officer Farid Suleman purchased 100,000 shares in September. The stock has fallen 49% from its 52-week high in March.

“Westwood looks like a good opportunity,” Coleman said. “It represents a reversal from insider selling in the $30s in June and July to buyers at $16 to $20. It definitely appears to be a price-sensitive reversal, indicating market overreaction to some uneasiness.”

Salem shares rose 50 cents Wednesday to $15.13 on the Nasdaq Stock Market, and Citadel increased $1.94 to $13.44 on Nasdaq. Westwood One climbed $2.13 to $20.44 in New York Stock Exchange trading.