The Dow Jones Industrial Average closed at a record high 11 consecutive days this Friday, the longest streak in decades. Are there any signs that the daily winning streak will come to an end? There may be some signs, but insider trading metrics appear to support the recent rally enjoyed by U.S. equity markets. Stock market participants would normally observe a huge spike in insider selling and a significant drop in insider buying when benchmarks hover around near all-time highs, but insiders keep buying shares.
Investors tracking insider trading behavior should be aware that corporate insiders can sell shares for a number of reasons. They may need the cash for an expensive personal purchase or they may simply sell for diversification purposes. Some insiders may discard shares because they see their company’s competitors stealing market share or observe an unsuccessful marketing campaign – one can never know the reason an insider sells shares unless the insider discloses that in Form 4 filings. However, insiders usually buy shares in their own companies for only one reason – they believe the shares are a bargain and have huge upside. With that in mind, let’s have a look at a set of noteworthy insider purchases and sales reported with the SEC on Friday.
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Executive at Struggling Beauty-Products Maker Buys Huge Block of Shares After Sell-Off
One member of Avon Products Inc. (NYSE:AVP)’s management team snapped up a huge block of shares at the end of the previous week. James S. Scully, Executive Vice President and Chief Operating Officer, bought 150,000 shares on Thursday at a price tag of $4.37 each. The purchase boosted Mr. Scully’s ownership stake to 292,241 shares.
The shares of the manufacturer and marketer of beauty and related products plunged in mid-February following the release of a disappointing earnings report. Avon Products Inc. (NYSE:AVP)’s revenue for the fourth quarter decreased by 2.4% quarter-over-quarter to $1.57 billion, marking the 21st consecutive quarter of revenue declines. The struggling beauty-products maker has been attempting to restructure in the past several years. For instance, Avon Products sold off its North American business in March 2016, as well as announced plans to cut $350 million in annual costs over a three-year time span at the beginning of the previous year. Analysts at Jefferies recently reiterated their ‘Buy’ rating and price target of $8, saying that the stock’s valuation is compelling after the mid-February sell-off. Avon’s shares are 10% in the red sofar in 2017. Ken Griffin’s Citadel Advisors LLC reported owning 1.78 million shares of Avon Products Inc. (NYSE:AVP) in its latest 13F filing.
The second page of this insider trading article focuses on discussing fresh insider buying observed at two other companies.