Heavy insider buying usually implies corporate insiders are bullish on their company’s future prospects, or they find their company’s shares severely undervalued by Mr. Market. In fact, past research finds that insider purchases tend to earn an abnormal return of more than 6% per year, which represents a strong argument in favor of keeping track of insider buying activity.
However, retail investors monitoring insider trading behavior need to keep in mind that insiders are restricted from engaging in “short-swing” transactions, which simply means that insiders cannot perform opposing transactions within a six-month period (e.g. buying 10,000 shares and then selling shares within a five-day timeframe). Hence, one could easily come to the conclusion that insider trading metrics are mostly suitable for long-term-oriented investors, as Board members and executives are indirectly forced to act as long-term investors. Insider Monkey compiles lists of noteworthy insider transactions on daily basis, thus enabling retail investors to find attractive investment opportunities based on insider trading metrics. Without further ado, let’s proceed to the discussion of notable insider trading activity recently observed at five companies.
Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).
CEO of Growing Provider of HCM and Workplace Management Software Solutions Buys Shares
Let’s kick off our discussion by looking into the insider buying registered at Asure Software Inc. (NASDAQ:ASUR). Chief Executive Officer Patrick Goepel snapped up 50,000 shares on Friday at a cost of $5.29 per share, lifting his overall holding to 650,097 shares.
The provider of human capital management and workplace management software solutions has seen the value of its shares rise by 19% since the beginning of 2016. Asure Software Inc. (NASDAQ:ASUR) currently offers two main product lines, AsureSpace and AsureForce. The first product line provides workplace management solutions that enable organizations to manage their office environments and optimize real estate utilization, while the other product line offers time and labor management solutions. The company’s revenue for the first half of 2016 was $16.39 million, up 21.5% year-on-year. AsureSpace revenue for the first two quarters of 2016 grew 5.1% year-over-year to $8.44 million, while AsureForce revenue jumped an impressive 45.5% year-on-year to $7.95 million. Jim Simons’ Renaissance Technologies LLC had 255,476 shares of Asure Software Inc. (NASDAQ:ASUR) in its portfolio at the end of June.
The next two pages of the article will discuss several noteworthy insider transactions observed at four other companies.