We heard from a name from the recent past. Stone House Capital of New York reported in a filing with the Securities & Exchange Commission that its holdings of USA Truck Inc. of Van Buren had been reduced to 588,961 shares, or 7.1 percent of the company.
As recently as early 2015, Stone House held more than 1.5 million shares when the price was $31.33. In May, Stone House sold 600,000 shares in a secondary sale for $19 per share — the price dropped in part because Stone House and Baker Street Capital of Los Angeles announced they were selling 2 million shares.
It’s not clear exactly when Stone House shed its USA Truck shares — it had 875,000 in May — but it certainly didn’t get $19 per share this time around. USA Truck, which has reported three consecutive quarterly losses in 2016, has seen its share price drop pretty consistently since August.
USA Truck shares were at a healthy $19.23 on Aug. 2 after starting the year at $17.39 and surpassing $20 occasionally during the year. On Aug. 3, the company announced a second-quarter loss of $1.3 million and the repurchase of 718,000 shares during the quarter for $13.4 million (an average of $18.66 each).
Analyst Donald Broughton of Avondale Partners asked during a conference call why the company would buy back stock when it knew it was headed for a negative quarter. CEO Randy Rogers said it was part of the company’s plan to increase long-term shareholder value.
“But if you’re losing money and you’re paying 2x book for the stock, there’s a whole host of people that would argue that’s not being fiduciarily responsible,” Broughton said. “But all right.”
The second-quarter report resulted in a steep drop for USA Truck shares, from $19.23 to $11.90 on Aug. 4. USA Truck now trades at around $9 per share.
When USA Truck reported its third-quarter financials earlier this month, executives said the company had not repurchased stock since the first week of August. They could have got a good price.
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