Three Strong Performing Companies See Corporate Insiders Unloading Company Stock & Insider Buying at Two Finance-Related Companies

Insider buying activity has been extremely weak in the past several weeks as U.S. publicly-traded companies were gradually unfolding their financial results for the second quarter. As the Dow Jones Industrial Average and Standard and Poor’s 500 Index are racking up new all-time highs, corporate insiders are not so enthusiastic about buying shares of their own companies. The recent volatility and global uncertainty might have left most investors left wondering what to do next, but surely one can find attractive investment opportunities in equity markets despite trading at all-time highs.

Insider buying registered at certain companies recently hit by sharp sell-offs post-earnings or after other disappointing announcements may point to attractive investment opportunities indeed. While there appear to be dozens of reasons corporate insiders sell shares in their own companies, there aren’t many reasons why insiders buy their companies’ stock. As a general rule, corporate insiders are buying shares in an attempt to generate good trading profits, either because they believe their companies’ shares are severely undervalued or because they anticipate great prospects ahead. Last week’s volume of insider buying more than tripled compared to the dollar volume recorded for the prior week, which implies that there are certain companies viewed by insiders as poised to go higher in the foreseeable future. Leaving this discussion aside, let’s lay out a list of five companies that witnessed noteworthy insider trading activity in the past several trading sessions.

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).

Regional Bank Registers Cluster of Insider Buying after Merger Announcement

F.N.B. Corp (NYSE:FNB) had three different insiders purchase shares this past week, a cluster of insider buying the investment community should definitely have a look at. To start with, William B. Campbell, Lead Independent Director since January 2012 and former Chairman, purchased 1,100 shares on Friday at a price tag of $11.98 each, lifting his overall holding to 82,771 shares. Director D. Stephen Martz snapped up 1,000 shares on Thursday for $11.97 each, which boosted his stake to 127,268 shares. Last but not least, Frank C. Mencini, yet another member of the company’s boardroom, bought 1,000 units of common stock on Friday at $11.97 apiece. After the recent purchase, Mr. Mencini currently owns 9,850 units of common stock.

The cluster of insider buying comes shortly after the diversified financial services company announced an agreement to buy Yadkin Financial Corp (NYSE:YDKN) in an all-stock transaction valued at $1.4 billion. The acquisition of the North Carolina-based bank holding company and parent of Yadkin Bank will offer the acquirer $7.5 billion in total assets, $5.3 billion in total deposits, $5.4 billion in total loans, as well as 100 banking offices located in North Carolina and South Carolina. FNB shares are down 9% thus far in 2016. Israel Englander’s Millennium Management owned 2.00 million shares of F.N.B. Corp (NYSE:FNB) at the end of March.

Little-Known Financial Services Company Sees Chairman Buy Some Shares

Shore Bancshares Inc. (NASDAQ:SHBI) also saw a member of its boardroom pile up some shares last week. Christopher F. Spurry, Chairman of the company’s Board, purchased 1,000 shares on Friday at $11.82 apiece, increasing his ownership stake to 20,867 shares. Mr. Spurry’s spouse owns a total of 1,047 shares of the $1.1 billion-asset financial holding company.

The largest independent financial services company on the Delmarva Peninsula has seen its market value jump by 6% since the start of 2016. Shore Bancshares Inc. (NASDAQ:SHBI) recently released its second-quarter earnings report, which showed that the company’s net income increased to $2.27 million from $1.63 million reported a year ago. However, the company’s second-quarter bottom line was lower than the $2.46 million figure recorded for the first quarter. The quarter-over-quarter decrease reflects slightly lower non-interest income due to insurance agency contingent commissions that are typically received in the first quarter of the year. Matthew Lindenbaum’s Basswood Capital had nearly 639,000 shares of Shore Bancshares Inc. (NASDAQ:SHBI) among its holdings on March 31.

Let’s head to the second page of this insider trading article, where we will reveal noteworthy insider selling recently registered at three companies.

High-Flying Maker of Analog Semiconductors Registers Heavy Insider Selling

Texas Instruments Incorporated (NASDAQ:TXN) has registered an enormous volume of insider selling in the past several trading sessions, but most insider selling was related to freshly-exercised stock options. Even so, there was some insider trading activity worth investors’ attention. Bing Xie, Senior Vice President of Worldwide Sales and Applications, discarded 8,435 shares on Friday at prices ranging from $69.69 to $70.41 per share, cutting his ownership to 190,161 shares. Moreover, Mr. Xie sold 56,250 freshly-exercised stock options two days earlier. R. Gregory Delagi, Senior Vice President and General Manager, offloaded 50,000 shares on Friday at price that fell between $69.65 and $70.45 per share, which cut his stake to 178,002 shares.

The heavy insider selling comes after the largest maker of analog semiconductors released better-than-expected financial results for the second quarter. Texas Instruments Incorporated (NASDAQ:TXN) has seen its market capitalization spike by 27% since the beginning of the year. Soon after the company released its second-quarter earnings report, analysts at Citigroup reiterated their ‘Buy’ rating on TI and raised their price target on the stock to $75 from $68, citing operational excellence and superior usage of cash. Beech Hill Partners, run by Paul Cantor, owns 3,650 shares of Texas Instruments Incorporated (NASDAQ:TXN) as of June 30.

Strong Performing Maker of Mice and Keyboards Witnesses Notable Insider Selling

Logitech International SA (USA) (NASDAQ:LOGI) also registered some heavy insider selling this past week. Chief Financial Officer Vincent Pilette discarded 100,000 shares on Friday at prices varying from $19.75 to $20.08 per share. Following the recent sale, Mr. Pilette currently owns 518,492 shares.

The shares of the well-known maker of mice and keyboards have jumped an impressive 31% so far in 2016, mainly owing to extremely strong financial results for the first quarter of fiscal 2017 that ended June 30. Logitech International SA (USA) (NASDAQ:LOGI) recorded first-quarter sales of $480 million, up 7% year-over-year. The company’s retail sales increased 13% year-on-year in constant currency, marking the highest quarterly growth in more than five years. Logitech also raised its full-year retail sales growth outlook to 8%-to-10% from the previous forecast of growth in the mid-single digits. The company delivers extraordinary results despite facing a constantly-falling PC market, with the company being able to successfully move beyond the PC space into various frontiers of connected devices. Jim Simons’ Renaissance Technologies LLC owned 2.15 million shares of Logitech International SA (USA) (NASDAQ:LOGI) at the end of the first quarter.

U.S. Temperature-Sensitive Truckload Carrier Sees CEO Unload Shares

The man in charge of Marten Transport Ltd (NASDAQ:MRTN) also discarded two blocks of shares this past week. Chairman and CEO Randolph L. Marten offloaded 50,000 shares on Thursday and 50,000 shares on Friday at prices ranging from $21.60 to $21.85 per share. After these transactions, Mr. Marten currently holds a stake of 7.15 million shares.

The U.S. temperature-sensitive truckload carrier specializing in transporting food and other consumer packaged goods that necessitate a temperature-controlled environment has seen the value of its shares advance 21% thus far in 2016. Marten Transport Ltd (NASDAQ:MRTN) released a strong second-quarter earnings report even though the company faced pricing pressures and a soft freight market during the quarter. The company’s second-quarter operating revenue increased to $166.1 million from $163.6 million recorded in the second quarter of 2015. Royce & Associates, founded by Chuck Royce, had 218,025 shares of Marten Transport Ltd (NASDAQ:MRTN) in its pool of holdings on March 31.

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