Co-Founder of Skechers USA Inc. (SKX) Sells Shares after Stock Drops, Plus Other Noteworthy Insider Trading Activity

As the saying goes, information is gold to the investor. Hence, every piece of information investors can get their hands on (information obtained via legal means) can assist their stock selection and analysis process. Insider trading data has served as an important piece of information for retail investors, analysts and hedge fund managers over the years. But what is insider trading and how can investors benefit from keeping track of insider trading behavior?

In simple words, insider trading involves the buying or selling of equity securities by individuals who hold access to material, non-public information. Of course, insider trading can be both legal and illegal, but this distinction is not overly important for non-insiders tracking insider trading activity reported with the SEC. Corporate insiders such as directors and executives usually have a better understanding of their companies’ business operations and future prospects than any of us; hence, their transactions can serve as great tips for outsiders. There appears to be one main reason insiders purchase shares in their own companies on the open market, which is that they believe the shares are severely undervalued or are poised to gain in the foreseeable future. One the other hand, insiders usually sell shares for a wide number of reasons (e.g. diversification needs, tax purposes, to name just a few), which explains why analysts and investors pay much more attention to insider buying than selling. Without further ado, let’s proceed to the discussion of several noteworthy insider transactions reported with the SEC on Wednesday.

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Cluster of Insider Buying at Medical Device Company After Share Price Plunge

Three different insiders at NuVasive Inc. (NASDAQ:NUVA) piled up more shares this week. To begin with, Joan B. Stafslien, Executive Vice President and General Counsel since early October, snapped up a new stake of 5,000 shares on Monday at prices ranging from $59.40 to $59.80 per share. Michael D. O’Halleran, who had joined the company’s Board of Directors in early August, also bought a new stake of 4,205 shares on Monday at a weighted average cost of $59.47 per share. The newly-bought stake is held through family trust. Board member Patrick S. Miles, who had joined the company’s boardroom with Mr. O’Halleran at the same time, acquired a stake of 16,967 shares this week at prices varying from $58.24 to $59.57 per share. The stake is held in a family trust. Mr. Miles also holds a direct ownership stake of 51,149 shares.

The shares of the medical device company took a hit after releasing its financial results for the third quarter. Hence, it appears that the three insiders intended to take advantage of the recent share price drop. NuVasive Inc. (NASDAQ:NUVA), which focuses on developing minimally-disruptive surgical products and procedurally-integrated solutions for spine surgery, reported revenue of $239.6 million for the quarter, marking an increase of 19.5% year-over-year. Despite the increase, the third-quarter top line came in lower than the company’s management had anticipated because of “capital and stocking orders in the United States that did not come through late in the quarter as planned.” NuVasive shares are 4% in the green this year. Navallier & Associates, founded by Louis G. Navallier, added a 73,994-share stake in NuVasive Inc. (NASDAQ:NUVA) to its portfolio during the third quarter.

The next two pages of this insider trading article will discuss more noteworthy insider transactions reported with the SEC on Wednesday.

Insider Buying at BDC After Completion of Equity Issuance

Two insiders at New Mountain Finance Corp. (NYSE:NMFC) snapped up some shares at the beginning of the week. Robert A. Hamwee, Chief Executive Officer since July 2010, bought 25,000 shares on Monday through multiple transactions at a weighted average cost of $13.33 per share. Following the recent transactions, Mr. Hamwee currently holds an aggregate of 250,100 shares. Board member David Ogens acquired 1,600 shares at a price tag of $13.40 each on Monday, a purchase that lifted his overall holding to 43,963 shares.

The aforementioned insider buying comes before the release of the company’s financial results for the quarter that ended September 30. The business development company that focuses on generating current income and capital appreciation through investments in debt securities at all levels of the capital structure is set to release its earnings report for the September quarter on November 8 after markets close. Just recently, New Mountain Finance Corp. (NYSE:NMFC) completed an offering of 5.75 million shares of common stock at a public offering price of $13.50 per share. The BDC plans to use the proceeds from the offering to fund new investments in portfolio companies, as well as use a portion of proceeds for other general corporate purposes. NMFC shares are up 3% year-to-date. P.A.W. Capital Partners, founded by Peter A. Wright, trimmed its position in New Mountain Finance Corp. (NYSE:NMFC) by 10% during the third quarter to 135,000 shares.

Insiders at Power-Center Focused REIT Buy the Dips

The man in charge of DDR Corp (NYSE:DDR) and one of the company’s Board members bought some shares this week. Director Thomas Finne added 1,577 shares to his portfolio on Monday at $15.20 apiece, lifting his holding to 48,000 shares. Chief Executive Officer and President Thomas F. August acquired one block of 15,000 shares and another one of 15,100 units on Monday at a weighted average price of $15.22 per share. The 15,100-share block is held by a family limited partnership. Mr. August holds a direct ownership stake of 25,000 shares following the recent purchases.

DDR Corp (NYSE:DDR) operates as a real estate investment trust focused on acquiring, owning, developing and leasing shopping centers. The REIT’s portfolio consists of 327 shopping centers, aggregating 107 million square feet in 36 states across the nation and Puerto Rico. DDR paid a dividend of $0.19 per share for the third quarter, which equates to a current annual dividend yield of 5.15%. The REIT’s portfolio leased rate was 95.4% at the end of September, down from 96.0% recorded at the end of December 2015. However, DDR increased the annualized base rent per occupied square foot by 5.6% year-over-year. The shares of the REIT have plunged 12% this year. Beech Hill Partners, led by current President and CEO Paul Cantor, reported owning 192,450 shares of DDR Corp (NYSE:DDR) through the latest round of 13Fs.

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

Co-Founder of Struggling Apparel Retailer Sells Shares After Earnings Disappointment

One member of Skechers USA Inc. (NYSE:SKX)’s executive team offloaded a sizeable block of shares this week. Michael Greenberg, a Co-Founder and President of Skechers, discarded 150,000 shares on Wednesday at a price of $20.58 per share. Following the recent sale, Mr. Greenberg currently holds a direct ownership stake of 401,679 shares.

Contrary to what one would normally expect, the recent insider selling comes shortly after the apparel company released top- and bottom-line figures that missed expectations. While some may have anticipated an uptick in insider buying at the company after the recent share price drop, the opposite is happening at Skechers USA Inc. (NYSE:SKX). The footwear maker also missed analysts’ expectations on guidance for the fourth quarter. Sketchers anticipates fourth-quarter net sales in the range of $710 million-to-$740 million, significantly lower than expectations of $800 million. “Impacting the Company’s domestic wholesale business was the sluggish retail environment in the United States, which resulted in several retailers either closing doors or ceasing operations, wide-spread discounting on other normally full-priced brands, as well as a shorter back-to-school period,” said the firm in a recent press release. The shares of Skechers are down 33% year-to-date. David Keidan’s Buckingham Capital Management cut its position in Skechers USA Inc. (NYSE:SKX) by 42% during the September quarter to around 477,000 shares.

CEO of Curtiss-Wright Offloads Shares

The man at the helm of Curtiss-Wright Corp. (NYSE:CW) also offloaded a great deal of shares earlier this week. President and CEO David C. Adams sold 27,475 shares on Wednesday at a price of $89.40 per share. Mr. Adams currently holds an aggregate of 60,031 shares following the recent sale. As mentioned on the first page of the article, insiders usually sell shares for a wide number of reasons. For instance, Mr. Adams sold to the shares mainly for the purchase of real estate, so the aforementioned sale should not spook investors.

Curtiss-Wright Corp. (NYSE:CW) operates as a diversified multinational provider of highly engineered, technologically advanced, value-added products and services to a broad range of industries. The company’s sales for the nine months that ended September 30 decreased by $74 million year-over-year to $1.54 billion. Curtiss-Wright’s third-quarter results came in ahead of management expectations, reflecting strong margin improvement in the company’s defense and power segments. The shares of Curtiss-Wright are 25% in the green this year. Jeffrey Smith’s Starboard Value LP was the owner of 323,600 shares of Curtiss-Wright Corp. (NYSE:CW) at the end of the June quarter.

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