It has been proven that insider purchases and sales can serve as relatively good predictors of future stock performance. Moreover, Peter Lynch, one of the greatest money managers and most famous investors of all time, once said: “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise”. Hence, insider buying might suggest management’s confidence in the future performance of the company and should be taken as a bullish sign. In this article we will be discussing three companies that have seen a large volume of insider buying recently, these companies being Apollo Global Management LLC (NYSE:APO), Physicians Realty Trust (NYSE:DOC), and Turtle Beach Corporation (NASDAQ:HEAR).
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 123% and beating the market by more than 65 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Going back to the recent insider buying activity, Apollo Global Management LLC (NYSE:APO) has seen high insider activity over the last few days. Robert K. Kraft, who was appointed to the Board of Directors of Apollo last year, completed two purchases of 10,000 shares of the company on August 7 and August 11 at prices of $21.15 and $21.24 per share respectively. Following the transactions, Kraft currently owns a stake of 70,000 shares in the company, which is now valued at approximately $1.44 million. The aforementioned insider activity at Apollo might be related to the company’s recent acquisition of a majority interest in a new company, AR Global Investments LLC, that is set to own a majority of the asset management business of the firm AR Capital. This deal will more than double the real estate assets under management of Apollo to $27 billon, and will also diversify Apollo’s investor base and provide significant growth opportunities. Let’s not forget to mention that the shares of Apollo have lost 13% since the beginning of the current year. Thomas E. Claugus’ GMT Capital is among the most bullish hedge funds on Apollo Global Management LLC (NYSE:APO), owning a stake of 2.98 million shares as of June 30.
Moving on to Physicians Realty Trust (NYSE:DOC), we noticed two different insiders making purchases of the company on August 11. Stanton D. Anderson, who acts as Independent Trustee of Physicians Realty Trust, acquired 3,200 shares of the company for $15.13 each. In the meantime, John T. Thomas, who currently serves as the Chief Executive Officer and President of the company, purchased 1,625 shares at a price of $15.14 per share. Following the 1,625-share transaction, John Thomas owns 139,982 shares in Physicians Realty Trust. The shares of the company have lost 7% year-to-date, after reaching an all-time high of over $18 during the current year. The self-managed healthcare real estate investment trust recently published its financial results for the second quarter of 2015. Physicians Realty Trust posted total revenue of $29.7 million for the quarter, increasing by 159% year-over-year. At the same time, the company’s net income came to $3.3 million, compared to a net loss of $0.6 million reported in the same quarter a year ago. Within our database, Michael Thompson’s BHR Capital represents the largest shareholder of Physicians Realty Trust (NYSE:DOC), with a stake of 2.13 million shares as of March 31.
Last but not least, we’ll take a look at the insider trading activity at Turtle Beach Corporation (NASDAQ:HEAR). Juergen Stark, the current Chief Executive Officer and President at Turtle, purchased 46,500 shares for $2.15 each, increasing his stake in the company to 86,500 shares. The shares of Turtle Beach Corporation have decreased by over 31% since the beginning of the current year, but the stock might rebound in the upcoming months as Turtle has made significant progress over the last few months on several initiatives that might boost the long-term growth of the company. For instance, the leading-edge audio technology company has announced several distribution partnerships with leading hearing healthcare groups that provide products to audiologists and hearing healthcare professionals throughout the United States. Turtle also recently announced its financial results for the second quarter of 2015, reporting revenue of $22.6 million, compared to $22.3 million a year ago. In the meantime, the company posted a net loss of $9.9 million or $0.23 per diluted share, compared to $9.3 million or $0.23 per share posted in the same quarter of 2014. Gregory A. Weaver’s Invicta Capital Management, which is among the 700 hedge funds that we track, represents the largest shareholder of Turtle Beach Corporation (NASDAQ:HEAR) with 1.03 million shares as of March 31.
Disclosure: None
