Insider purchases completed by famous CEOs and well-known executives usually receive the most attention from media and investors, but even individual purchases made by such top-tier executives may not be as informative as clusters of insider buying involving three or more insiders. Hence, retail investors seeking to trade on insider trading data should look for clusters of insider buying. Of course, these clusters are no common event, but they do occur once in a while.
Insider Monkey reveals such collections of insider buying in our daily insider trading articles whenever possible, though there haven’t been many companies with such robust insider buying action over the past several weeks. With U.S. equities heading towards all-time highs and the kick-off of the second quarter earnings season, insider buying has been somewhat silent of late. But why would anyone bother to keep track of insider buying at all, even clusters of buying? The simple answer is that corporate insiders know a lot more about their company’s prospects and daily developments than anyone else, so investors would be wise to keep a close eye on how insiders are trading their company’s shares in general. That said, the following article will discuss a set of noteworthy insider purchases and sales reported with the SEC on Thursday.
Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).
Mini-Cluster of Insider Buying at Leading Private Health Insurance Exchange
eHealth Inc. (NASDAQ:EHTH) witnessed a mini-cluster of insider buying earlier this week, with two different insiders purchasing sizable blocks of shares. Chief Executive Officer Scott N. Flanders purchased 73,000 shares on Tuesday, 38,000 shares on Wednesday, and 6,000 shares on Thursday at prices ranging from $8.99 to $9.50 per share, boosting his overall holding to 262,406 shares. Michael Goldberg, Board member since June 1999, snatched up 25,000 shares on Tuesday at a weighted average price of $9.28 per share, all of which are held by the Michael D. Goldberg Family Trust that currently owns 44,419 shares. Mr. Goldberg also holds a direct ownership stake of 58,302 shares.
It appears that the voluminous insider buying at the leading private online source of health insurance for individuals, families and small businesses has sent the company’s stock up by approximately 10% in today’s trading session. eHealth shares are down by a disturbing 26% in the past month, reflecting the company’s seemingly disappointing second quarter earnings report. eHealth Inc. (NASDAQ:EHTH) suspended its 2016 financial guidance, citing its recent leadership overhaul and a planned review of the company’s business. The shares of the nation’s largest private health insurance exchange are up by a little less than 1% year-to-date. Radix Partners, run by Joshua Packwood and Schuster Tanger, acquired a new stake 24,577 shares of eHealth Inc. (NASDAQ:EHTH) during the second quarter.
The second page of this article discusses the fresh insider buying registered at two companies, while the final page of the article discusses the noteworthy insider selling at two other companies.