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Cluster of Insider Selling at High-Yield REIT and Other Noteworthy Insider Trading

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Current research and studies conducted in the not-so-distant past conclude that investors could build profitable portfolios based on a strategy that mimics specific insider trading activity. Corporate insiders have a great deal of information at their disposal and investors should take notice of how insiders trade their company’s stock. True, insiders know a lot more about what is going on at their companies than any of us or any other professional money managers.

By buying shares when corporate insiders do, investors can earn significantly higher returns than they would earn by simply investing in a stock market index. Nonetheless, insider trading pundits recommend following clusters of insider buying, which are believed to be much more informative than single buys. However, the strategy of blindly mimicking each insider purchase or cluster of buying does not guarantee success. It isn’t hard to find securities in which corporate insiders made buys at significantly higher prices than current ones, so investors should not solely base their judgment on insider trading metrics. Having this in mind, let’s turn our focus to a set of noteworthy insider transactions reported with the SEC on Monday.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 39.7%, topping the 24.1% gain registered by S&P 500 ETFs. Insider Monkey’s enhanced small-cap strategy registered gains of more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points in the last 4.5 years (see more details).

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Board Member at Large Electric Power Company Buys Shares

To begin with, one member of NextEra Energy Inc. (NYSE:NEE)’s boardroom purchased some shares at the end of the previous week. William H. Swanson, appointed to the company’s Board of Directors in mid-October 2009, snatched up 3,860 shares on Friday at a price tag of $128.86 apiece. Mr. Swanson currently owns an aggregate of 25,180 shares following the Friday purchase.

The shares of the large electric power company, which operates the largest generator of renewable energy from the wind and sun in the world, have gained 15% in the past 12 moths. According to fresh media reports, NextEra Energy Inc. (NYSE:NEE)’s planned acquisition of 100% of the equity of reorganized Energy Future Holdings Corp moved a step closer to completion when a judge said he would confirm the acquiree’s bankruptcy-exit plan. Dallas-based Energy Future has an indirect ownership of around 80% in Oncor Electric Delivery Company LLC, one of the country’s largest electricity transmission businesses. NextEra Energy entered into additional agreements in late October 2016, which would result in NextEra being the sole owner of Oncor. Adage Capital Management, founded by Phill Gross and Robert Atchinson, reported ownership of 2.37 million shares of NextEra Energy Inc. (NYSE:NEE) in its 13F filing for the fourth quarter.

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Let’s head to the next page of this insider trading article, where we discuss more insider buying observed at other companies.

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