Board Members at High-Dividend-Paying BDC and Low-Priced Exploration Stage Mining Company Purchase Shares, Plus Other Insider Transactions

Each piece of insider buying activity is worth the attention of the investment community regardless of the number of shares bought by corporate insiders. Even the buying conducted by freshly-appointed Board members and corporate executives to meet stock ownership guidelines represents a positive indicator. Why so? Because the whole purpose of these stock ownership guidelines involves aligning the executive team’s interests with those of shareholders.

Nonetheless, retail investors should not blindly mimic each insider purchase – insiders may be wrong on some occasions like any other human being. Instead, investors should incorporate insider trading metrics into their securities selection and research process, a practice employed by successful hedge fund vehicles as well. Insider Monkey does not attempt to propagate investment opportunities through our daily insider trading articles – this is outside our scope. Insider Monkey’s underlying purpose involves helping investors and other stock market participants make more informed decisions. That being said, let’s have a look at a set of insider purchases and sales reported with the U.S. Securities and Exchange Commission on Wednesday.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Board Member at Low-Priced Exploration Stage Mining Company Buys Shares

Let’s begin our discussion by analyzing some mild insider buying recently observed at Paramount Gold Nevada Corp (NYSEMKT:PZG). Board member Christopher J. Reynolds purchased 10,000 shares on Wednesday at a price tag of $1.86 each, a purchase that boosted his holding to 11,500 shares.

The emerging growth company engaged in the business of acquiring, exploring and developing precious metal projects in the United States has seen the value of its shares advance by 74% since the beginning of the year. As a non-producing company, Paramount Gold Nevada Corp (NYSEMKT:PZG) owns advanced stage exploration projects in the states of Nevada and Oregon. In early November, the company said its received approval of its drill program at the 100%-owned Grassy Mountain Gold Project in Eastern Oregon, which is an important component of the Pre-Feasibility Study commenced in late August. This PFS involves a detailed analysis of all major parameters involved in constructing and operating a mine, including projected capital and operating costs, production levels and expected returns under various scenarios. Jim Simons’ Renaissance Technologies LLC had 178,900 shares of Paramount Gold Nevada Corp (NYSEMKT:PZG) in its portfolio at the end of the third quarter.

Let’s head to the next two pages of this article, where we discuss other insider transactions reported with the SEC on Wednesday.

Board Member of High-Dividend-Paying BDC Purchases Shares

A member of Fifth Street Finance Corp. (NASDAQ:FSC)’s Board of Directors also piled up some shares earlier this week. Richard P. Dutkiewicz, a member of the company’s boardroom since February 2010, snapped up 5,000 shares on Tuesday at a price of $5.53 per share. Following the recent purchase, Mr. Dutkiewicz currently owns an aggregate of 19,847 shares.

Fifth Street Finance Corp. (NASDAQ:FSC) operates as a business development company that lends and invests in small and mid-sized companies, mainly in connection with investments by private equity sponsors. At the end of September, the BDC’s portfolio consisted of investments in 129 companies, 110 of which were made in connection with investments by private equity sponsors. As of the end of September, the company had five investments on which it had stopped accruing cash and/or payment-in-kind interest or original issue discount income. Fifth Street Finance currently pays shareholders a monthly dividend of $0.06 per share, which equates to an annual dividend yield of 13.07%. The shares of the BDC are 13% in the red this year. Nathaniel August’s Mangrove Partners reported ownership of 1.16 million shares of Fifth Street Finance Corp. (NASDAQ:FSC) through the latest round of 13Fs.

Insider at Office REIT Buys Some Shares

One insider at City Office REIT Inc. (NYSE:CIO) increased his ownership stake this week as well. Board member Jeffrey D. Kohn snatched up 3,700 units of common stock on Tuesday at $12.43 apiece, lifting his holding to 203,700 units.

The real estate investment trust focused on owning and acquiring office properties has seen the value of its shares advance by 5% since the start of the year. City Office REIT Inc. (NYSE:CIO) owned 15 properties at the end of September, comprised of 33 office buildings with approximately 3.5 million square feet of net rentable area. The REIT’s third-quarter revenue, which includes net rental income (including parking, signage and other income, as well as the recovery of operating costs and property taxes from tenants), rose by 29% year-over-year to $18.8 million. The increase mainly reflects several completed acquisitions, including the acquisition of 190 Office Center in September 2015, the acquisition of Intellicenter in the same month, the acquisition of Carillon Point in June, as well as the acquisition of FRP Collection in July. There were six asset managers tracked by Insider Monkey with equity stakes in the REIT at the end of the third quarter, who amassed around 7% of the company’s common stock. Jim Simons’ Renaissance Technologies LLC was the owner of 575,320 shares of City Office REIT Inc. (NYSE:CIO) on September 30.

The final page of this article will discuss some fresh insider selling observed at two other companies.

Several Insiders at WebMD Health Offload Shares

Two insiders at WebMD Health Corp. (NASDAQ:WBMD) offloaded shares this week. To start with, Martin J. Wygod, Chairman of the Board of WebMD since May 2005, sold 50,000 shares on Monday, 40,710 shares on Tuesday, and 4,290 shares on Wednesday at prices varying from $53.06 to $53.67 per share, all of which were held indirectly by a trust fund that currently owns 677,173 shares. Mr. Wygod also holds a direct ownership stake of 143,334 shares. Joseph E. Smith, who became a member of the company’s Board of Directors in October 2009, discarded 25,821 shares on Monday at prices that fell between $53.20 and $53.31 per share, cutting his overall stake to 23,921 shares.

WebMD Health Corp. (NASDAQ:WBMD) generates revenue from the advertising and sponsorship services of the WebMD Health Network, which includes its primary public portal for consumers and related mobile-optimized sites and mobile apps, its primary public portal for physicians and other healthcare professionals, as well as other sites and apps through which the company provides branded health and wellness content, tools and services. The company’s total revenue for the three months that ended September increased by 12.3% year-over-year to $171.44 million. The shares of WebMD Health are up 10% thus far in 2016. Michael Lowenstein’s Kensico Capital had around 5.10 million shares of WebMD Health Corp. (NASDAQ:WBMD) in its portfolio of holdings at the end of September.

Board Member at Independent Bank Group Sells Shares After Acquisition Announcement

One member of Independent Bank Group Inc. (NASDAQ:IBTX)’s Board of Directors unloaded a great deal of shares this week. Douglas A. Cifu, who has been a director since 2008 and currently serves as the Board’s lead independent director, liquidated 26,677 shares on Tuesday and 18,323 shares on Wednesday at prices varying from $62.80 to $63.85 per share. Following the recent sales, Mr. Cifu currently owns a total of 5,990 shares directly, along with an additional indirect ownership stake of 405,000 shares held by VV-IB Holdings LLC.

The community-centric lending institution has seen its market capitalization rise by an impressive 96% since the beginning of the year, which likely explains the insider selling discussed above. In late November, Independent Bank Group Inc. (NASDAQ:IBTX) agreed to acquire Carlile Bancshares Inc. and its subsidiary Northstar Bank, which operates 24 full-service banking locations in Texas and 18 banking locations in Colorado. The aggregate consideration of the all-stock merger amounts to $434 million. The number of hedge fund firms invested in Independent Bank Group fell to nine from 12 during the third quarter. Glenn Russell Dubin’s HIghbridge Capital Management added a 9,199-share stake in Independent Bank Group Inc. (NASDAQ:IBTX) to its portfolio during the September quarter.

Disclosure: None