CEO of Struggling U.S. Footwear Maker Buys Half a Million Shares, Board Member at Home Depot Inc. (HD) Buys Shares, Plus Other Insider Trading Activity

Past research suggests that market participants should perceive insider buying as being much more informative and predictive than insider selling, and rightly so. While corporate insiders are usually buying shares in their own companies because they anticipate better times ahead, Board members and executives can sell shares for a wide range of reasons that may not be related to their companies’ current fundamentals or future prospects.

Although insiders could be selling shares simply to raise capital for personal needs, this does not necessarily imply that all insider sales are not informative. A cluster of insider selling may serve as a strong signal that a company’s market value is approaching or even exceeding its fair market value, as these clusters of selling generally show that there is a consensus among insiders on the possibility that a company’s shares are overvalued. Having this in mind, the following article will discuss several noteworthy insider buys and sales reported with the SEC on Wednesday.

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CEO of Struggling U.S. Footwear Maker Buys Half a Million Shares

To begin with, let’s have a look at the voluminous insider buying observed at Skechers USA Inc. (NYSE:SKX). Chief Executive Officer Robert Greenberg filed Wednesday to disclose the purchases of 250,000 Class A shares on Monday and an additional 250,000 shares on Tuesday, all of which are held indirectly by the Greenberg Family Trust. The shares were purchased at a weighted average price of $21.96 per share. Mr. Greenberg also owns a direct ownership stake of 277,693 shares.

After the somewhat surprising sale of 150,000 shares completed by Michael Greenberg, the CEO’s son and the President of Skechers, earlier this month following the release of weaker-than-expected top- and bottom-line figures, the CEO’s purchases discussed above represent a sign of confidence in the future prospects of the apparel company. The footwear maker has been recently hit by a sluggish retail environment in the United States, wide-spread discounting, as well as a shorter back-to-school period. As Skechers USA Inc. (NYSE:SKX) has been struggling against tough competition in the United States, the company plans to drive growth in Asia. Just recently, the company formed a new joint venture with Luen Thai Enterprises in South Korea in an attempt to grow its business in the country and penetrate the region. The shares of Skechers are down 24% thus far in 2016. Daniel S. Och’s OZ Management added a 2.98 million-share stake in Skechers USA Inc. (NYSE:SKX) to its pool of holdings during the third quarter.

Let’s head to the next two pages of this insider trading article, where we’ll discuss more insider buying and selling observed at other companies.

Board Member at Strong Performing Home Improvement Retailer Buys Shares

One member of Home Depot Inc. (NYSE:HD)’s boardroom bought a sizeable block of shares earlier this week. Board member Mark Vadon, one of the leading internet retailing entrepreneurs in the United States, snatched up 15,000 shares on Tuesday at a price tag of $129.87 each. Following the recent purchase, Mr. Vadon currently owns an aggregate of 31,095 shares.

The shares of the home improvement retailer are 2% in the red this year. While several other home improvement suppliers have missed revenue expectations recently, Home Depot Inc. (NYSE:HD) delivered solid numbers for its third fiscal quarter of 2016. One analyst from Piper Jaffray found an explanation to Home Depot’s strong performance in the location of its stores. “Home Depot tends to be more centrally located in metropolitan markets and that’s where we think you have older housing stock where a lot of the renovation activity is taking place,” said a Piper Jaffray analyst in a recent note. Home Depot recorded net sales of $23.2 billion for the three months that ended October 30, up from $21.8 billion reported for the same period of the previous year. The home improvement retailer has received more attention from the hedge fund industry, as the number of funds from our system with stakes in Home Depot increased to 72 from 67 during the September quarter. Ken Fisher’s Fisher Asset Management was the owner of 8.48 million shares of Home Depot Inc. (NYSE:HD) at the end of the September.

Chairman at Global Licensor of Brands Purchases Nearly $1 Million Worth of Shares

An influential member of Cherokee Inc. (NASDAQ:CHKE)’s Board of Directors also purchased a great deal of shares this week. Jess M. Ravich, Chairman of the company’s Board since January 2011 and Board member since May 1995, added 101,602 units of common stock to his holding on Tuesday at a price of $9.50 per unit. Following the recent purchase, Mr. Ravich currently holds an ownership stake of 341,848 shares.

The global licensor of style focused lifestyle brands for apparel, footwear, home products and accessories has seen the value of its stock plunge by 39% since the start of the year. Earlier this week, Cherokee Inc. (NASDAQ:CHKE) agreed to acquire all issued and outstanding shares of footwear company Hi-Tech Sports International Holdings B.V. for a cash consideration of around $95.8 million. Cherokee also inked agreements to sell certain assets related to Hi-Tech’s wholesale operations to new operating partners. As part of the deal, the new operating partners entered or will enter into license agreements with Cherokee, pursuant to which each operating partner will pay royalties for the future use of certain Hi-Tech intellectual property. Jeffrey Bronchick’s Cove Street Capital reported ownership of 1.72 million shares of Cherokee Inc. (NASDAQ:CHKE) in its 13F filing for the third quarter.

The last page of this article will focus on fresh insider selling observed at two other companies.

Mini-Cluster of Insider Selling at Expanding Hospitality Company

Several executives at Hyatt Hotels Corporation (NYSE:H) trimmed their holdings this week. To start with, H. Charles Floyd, Executive Vice President and Global President of Operations, offloaded 42,000 Class A shares on Monday at prices varying from $53.00 to $53.82 per share. Mr. Floyd currently owns an aggregate of 106,103 shares following the recent sale. Pete Sears, Executive Vice President and Group President of Americas, liquidated 6,620 Class A shares on the same day at prices that fell between $52.78 and $53.78 per share, cutting his ownership stake to 8,292 shares.

The global hospitality company’s worldwide hotel portfolio consisted of 639 hotels at the end of September, totaling 166,731 rooms. The shares of Hyatt Hotels Corporation (NYSE:H) have recovered since the company faced a breach of payment cards that affected 250 hotels in around 50 countries from the end of 2015 through the beginning of this year, with the stock being up 9% year-to-date. The hospitality company has been implementing expansion efforts as of late despite facing serious competition from digital upstarts, with 60 hotels due to open this year. The company opened 11 hotels during the third quarter. John Khoury’s Long Pond Capital was the owner of 1.86 million shares of Hyatt Hotels Corporation (NYSE:H) at the end of September.

Executive at High-Flying Independent Natural Gas and Oil Company Unloads Shares

One member of Rice Energy Inc. (NYSE:RICE)’s executive team discarded a high number of shares this week. James W. Rogers, Senior Vice President, Chief Accounting and Administrative Officer, and Treasurer, sold 85,544 shares on Monday and 28,979 shares on Tuesday at prices ranging from $25.00 to $25.79 per share. After the recent sales, Mr. Rogers currently owns 60,802 shares of Rice Energy.

The independent natural gas and oil company engaged in the acquisition, exploration and development of natural gas, oil and NGL properties in the Appalachian Basin has seen the value of its shares skyrocket by 123% since the beginning of the year. Interestingly enough, the company’s shares are up nearly 90% since Insider Monkey covered some noteworthy insider buying at Rice Energy in early December 2015. Rice Energy Inc. (NYSE:RICE)’s natural gas, oil and NGL sales for the third quarter increased to $162.70 million from $130.15 million recorded a year ago, predominantly reflecting an increase in production in the third quarter of 2016 compared to the same quarter of 2015. There were 43 hedge funds tracked by our team invested in the independent natural gas and oil company at the end of the third quarter, amassing 23% of the company’s outstanding common stock. Andreas Halvorsen’s Viking Global had 14.97 million shares of Rice Energy Inc. (NYSE:RICE) in its portfolio on September 30.

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