Corporate insiders have two means of buying and selling shares of their companies. The first option involves conducting transactions in the open market through a broker like any other retail investor does. The second option involves selling or buying shares on a systematic basis through pre-arranged trading plans, referred to as 10b5-1 plans.
Investors are well aware that executives and Board members sell shares for a wide range of reasons that may not be related to their company’s current developments or future outlook. These 10b5-1 plans enable insiders to complete some diversification without facing the prospect of insider trading liability, simultaneously avoiding intensifying worries among investors with regard to the insider selling. As Insider Monkey attempts to find information-rich trades only, our team ignores all insider transactions made under pre-arranged trading plans. It is nearly impossible to find out which insider sales are conducted because insiders anticipate bad times ahead, but one can at least get rid of those insider transactions deemed to be useless for certain. Having this in mind, the following article will mostly discuss a set of noteworthy insider selling observed at four companies, as well as some mild insider buying at one company.
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 of Mobile Content Provider Buys Shares
One important member of Zedge Inc. (NYSEMKT:ZDGE)’s Board of Directors has been purchasing more shares in the past several trading sessions. Howard S. Jonas, the Vice Chairman of Zedge’s boardroom since mid-November 2016, snapped up 6,382 Class B shares on Thursday at $3.23 apiece, 6,200 Class B shares for $3.17 each on Wednesday, as well as 5,900 units at $3.09 apiece on Tuesday. Following this series of transactions, Mr. Jonas currently owns an aggregate of 189,680 Class B shares.
Zedge Inc. (NYSEMKT:ZDGE), which provides a content platform that enables consumers to personalize their mobile devices with free ringtones, wallpapers, home screen app icons and notification sounds, has seen the value of its shares decrease by 29% in the past six months. The mobile content provider was spun-off by IDT Corporation (NYSE:IDT) in early June and became an independent public company. Unlike other phone customization providers, Zedge is predominantly advertising supported with most revenue coming from direct advertising in the company’s app. The company’s revenues for the three months that ended October 31 decreased to $2.38 million from $2.56 million, mainly reflecting a 10.7% decrease in the average revenue per monthly active user due to the company’s app being temporarily removed from the iTunes Store in late January 2016. Jim Simons’ Renaissance Technologies LLC held roughly 273,000 shares of Zedge Inc. (NYSEMKT:ZDGE) at the end of September.
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The next two pages of this article will discuss fresh insider selling observed at four companies.