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Cluster of Insider Selling at Cracker Barrel (CBRL), Retiring CEO of TE Connectivity (TEL) Sells Shares, Plus Other Insider Activity

Numerous studies have shown that corporate insiders earn substantial profits from trading the securities of their own firms. Although this is good news for outsiders, it might still be difficult to assess the implications of this finding for outside investors. Can an investor mimic insiders and make profits? If so, what is the scale of the profits?

Nonetheless, a number of studies have concluded that mimicking insiders is profitable, so investors should attempt to incorporate insider trading data into their analysis process. Most studies on insider trading behavior also arrived at a common conclusion: that insider buying always produces higher returns than insider selling. Hence, although the approach of blindly mimicking each insider trade and hoping to generate significant trading profits is associated with great risks, investors would definitely be better off by making use of insider trading data. That being said, let’s have a look at a set of noteworthy insider transactions, both insider purchases and sales, reported with the SEC on Monday.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Insider Trading 3

Top-Tier Executives at Insurance Holding Company Buy Shares

Two members of Conifer Holdings Inc. (NASDAQ:CNFR)’s executive team bought shares last week. To begin with, Chairman and CEO James G. Petcoff purchased 35,000 shares on Wednesday at a price tag of $7.20 each, boosting his direct ownership stake to 42,057 shares. Mr. Petcoff also holds an indirect ownership stake of 2.15 million shares, held in the James G. Petcoff Revocable Trust. President Brian J. Roney snatched up 2,000 shares last Monday at $7.34 apiece, which are held in an Individual Retirement Rollover Account (IRRA) that currently owns 31,908 shares. The President also owns an aggregate of 251,012 shares directly.

The insurance holding company that markets and services its product offerings through specialty commercial and specialty personal insurance business lines has seen the value of its shares drop by 22% this year. Conifer Holdings Inc. (NASDAQ:CNFR) reported gross written premiums of $83.62 million for the first three quarters of 2016, up from $68.51 million recorded for the same period of the previous year. The increase reflects the company’s expansion in the hospitality, security services, low-value dwelling, and wind-exposed homeowners lines of business.

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The next two pages of this article will discuss the fresh insider buying and selling action recently observed at a few other companies.

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