Most indexes around the world are in the red on Monday amid a strengthening dollar as investors are looking forward to the meeting of central bank chiefs at the end of the week, with the expectation that Fed chair Janet Yellen will hint towards an interest rate hike in September. Meanwhile, oil prices are heading lower as Iran still hasn’t made a decision regarding its attendance at the OPEC’s production meeting next month and experts express concern that the meeting won’t affect oversupply.
On the US stock market, the week is expected to be quiet until Friday, when Yellen’s talk is scheduled. Meanwhile, corporate insiders have reported some interesting transactions and, in this article, we are going to take a closer look at several companies with noteworthy insider buying and selling.
Following insider trading is a strategy that is overlooked by many, although there have been studies conducted that show the profitability of imitating corporate insiders (see more details here). Aside from insiders, investors can also analyze how smart money investors are positioned towards a stock. This is a key aspect of our strategy that generated a double-digit alpha over the long-run (read more about our strategy).
Having said that, let’s dig deeper into some recent insider transactions, starting with the biggest company on our list, Facebook Inc (NASDAQ:FB). In 2015, Mark Zuckerberg and his wife, Priscilla Chan, announced that they would give away 99% of their stakes in Facebook Inc (NASDAQ:FB) to charity over their lifetime and set up the Chan Zuckerberg Initiative for this purpose. Last week, the CEO of Facebook reported the sale of 767,905 shares of the company held by CZI. Based on the weighted average price, the total value of the transactions amounted to nearly $95 million. After Zuckerberg announced the creation of the CZI, he moved 99% of his stake in Facebook to the organization and said it would sell around $1.00 billion worth of stock each year at first. Aside from Zuckerberg, several other insiders reported selling shares last week, although all those transactions were effected pursuant to Rule 10b5-1 trading plans, which allow insiders to sell predetermined amounts of shares at a predetermined time. Facebook’s stock has had a decent run so far this year, having gained over 19% year-to-date, as the company managed to surpass analysts’ forecasts each quarter reported this year and registered growth in both Monthly Active Users and Mobile Monthly Active Users. Among the smart money investors we track, Facebook Inc (NASDAQ:FB) ranks as the most popular stock as of the end of June, with 148 investors having reported a long position in the latest round of 13F filings, although this number was down from 164 funds that held shares at the end of March (the number of 13F filing funds in our database dropped by a net total of 17 quarter-over-quarter, which likely accounts for some of the drop in Facebook ownership).
Texas Roadhouse Inc (NASDAQ:TXRH) is another company that saw a top executive sell shares last week. The company’s chairman and CEO, Wayne Kent Taylor, disclosed the sale of 150,000 shares in three transactions at an average price of $46 per unit. The shares were held directly by Taylor and following the sale, he owns around 4.23 million shares directly and another 1.1 million shares held indirectly through Taylor Family Partners, Ltd. Texas Roadhouse Inc (NASDAQ:TXRH) operates over 500 restaurants in 49 states and five international locations. Its stock has gained over 27% year-to-date despite a slump registered at the beginning of August, when the company reported second quarter EPS of $0.47, higher than estimates of $0.45, but missed revenue expectations by $1.12 million with a figure of $508.81 million. Nevertheless, it experienced 4.5% comparable-restaurant sales growth at company restaurants and 2.6% growth at franchise locations. Among the funds in our database, Texas Roadhouse Inc (NASDAQ:TXRH) is not very popular, with just 14 funds holding less than 3% of its stock as of the end of June.
On the next page, we are going to take a look at the insider selling registered at World Wrestling Entertainment, Inc. (NYSE:WWE), as well as at two companies with insider buying.