Ex-CEO of TD Ameritrade Sells Shares, Co-Founder of Chipmaker Offloads Shares, Plus Insider Buying at Other Companies

A longstanding rule of thumb says that corporate insiders buy shares of their own companies for one simple reason – they believe Mr. Market severely undervalues their companies’ stock. Although it’s true that insider purchases tend to beat broader market benchmarks on aggregate, Insider Monkey does not recommend that investors blindly mimic each insider purchase. However, we would like to emphasize three simple tips that will likely allow investors to identify information-rich and profit-generating insider buying activity.

The most important tip would be to look for clusters of insider buying, which usually suggest that there is a consensus among insiders that their companies’ shares are undervalued. Another important tip would be to ignore insider transactions conducted under pre-arranged trading plans, as past research concludes that spur-of-the-moment insider purchases tend to generate higher returns than those conducted under trading plans (which could have been scheduled several months in advance). Last but certainly not least, insider trading watchers need to look for insider trading conducted by long-time insiders, as freshly-appointed Board members or executives may buy shares because of stock ownership guidelines. That said, the following article will discuss fresh insider buying witnessed at three companies, as well as mention some noteworthy insider selling registered at two other companies.

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Board Member at Ameris Bank’s Holding Company Buys Shares

According to our insider buying database, there had not been any insider buying at Ameris Bancorp (NASDAQ:ABCB) since mid-2015, until last week. Board member William I. Bowen Jr. snapped up 1,000 shares on Monday at $43.26 apiece, lifting his direct ownership stake to 8,819 shares. Mr. Bowen also reported the purchase of an additional 50 shares for $42.70 each, which are held indirectly by his children.

The financial holding company for Ameris Bank has seen its market capitalization increase by 56% in the past year, mainly owing to a strong run enjoyed since the American presidential election in early-November. Earlier this week, President Donald Trump reiterated his plans to roll back the Dodd-Frank financial regulations which were enacted in 2010 to prevent another financial crisis like the one that occurred in 2008/2009. The Dodd-Frank regulations have previously been criticized for crippling many financial institutions, especially smaller ones such as community banks. Ameris Bancorp (NASDAQ:ABCB), which operated 97 branches in select markets in Georgia, Alabama, Florida, and South Carolina at the end of December, may indeed benefit from cuts to regulations should the new Trump administration deliver on its promises. Ken Fisher’s Fisher Asset Management trimmed its position in Ameris Bancorp (NASDAQ:ABCB) by 46% during the December quarter, to 48,091 shares.

On the next page of this article we’ll discuss the fresh insider buying at two other companies.

President of Large Small-Cap, Closed-End Fund Buys Shares at Discount

One member of Royce Value Trust Inc. (NYSE:RVT)’s management team purchased a few shares last week. President Christopher D. Clark bought 1,500 shares on Friday at a price tag of $13.88 each. Mr. Clark owns 3,540 shares after the Friday purchase.

Royce Value Trust Inc. (NYSE:RVT) operates as a closed-end diversified management investment company that seeks to invest at least 65% of its assets in equity securities, primarily those of small-cap and micro-cap companies. As a closed-end fund’s share price is set by supply and demand forces, the value of closed-end shares can deviate from their net asset value quite significantly on certain occasions. For instance, the largest small-cap closed-end fund recorded net assets per share of $15.84 as of December 31, whereas the market share price of the fund stood at only $13.39. This essentially means that investors could have bought $15,840 of assets by paying only $13,390. More importantly, past research concludes that closed-end funds trading at a discount tend to outperform the market and insiders seem to attempt to capitalize on that. Murray Stahl’s Horizon Asset Management owned approximately 111,000 shares of Royce Value Trust Inc. (NYSE:RVT) at the end of September.

Executive at Battered Life Sciences Company Purchases Shares After Dividend Cut, Reduced Guidance

An executive at Meridian Bioscience Inc. (NASDAQ:VIVO) also piled up some shares this past week. Lawrence J. Baldini, President of Global Operations and Executive Vice President, snatched up 4,000 shares on Thursday at a price of $12.70 per share. Mr. Baldini currently owns a total of 106,934 shares after the recent purchase.

The fully-integrated life sciences company has seen the value of its shares decline by 31% in the past year, mainly due to a serious plunge experienced several days ago when the company announced a significant dividend cut and released a disappointing first-quarter earnings report. Meridian Bioscience Inc. (NASDAQ:VIVO)’s Board of Directors reduced the company’s annual dividend payout from $0.80 per share to a mere $0.50 per share. The management of the diagnostics-focused life sciences company also reduced its revenue and earnings forecast for its 2017 fiscal year, citing revenue decreases in Meridian’s Americas diagnostic company (i.e. the company’s largest profit driver) “due to customer buying patterns and general weakness overall.” Joel Greenblatt’s Gotham Asset Management added a 247,000-share stake in Bioscience Inc. (NASDAQ:VIVO) to its pool of holdings during the third quarter.

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

Co-Founder of Soon-to-Be-Acquired Chipmaker Offloads Shares

One of the most well-informed insiders at Linear Technology Corporation (NASDAQ:LLTC) offloaded a great deal of shares last week. Executive Chairman of the Board Robert H. Swanson Jr., who co-founded the company in 1981, discarded 38,529 shares on Friday, 6,541 shares on Thursday and 25,000 shares on Wednesday at prices ranging from $62.85 to $63.01 per share. These shares were held in a trust that currently owns 200,476 Linear Technology shares. Mr. Swanson also holds a direct ownership stake of 210,172 shares.

The aforementioned insider selling would not normally be considered an information-rich insider trade, despite the massive size of the sales. Linear Technology Corporation (NASDAQ:LLTC) agreed to sell itself to fellow chipmaker Analog Devices Inc. (NASDAQ:ADI) in late-July of 2016 for around $14.8 billion. Under the terms of the agreement reached last summer, the shareholders of Linear Technology are entitled to $46 per share in cash and 0.2321 shares of Analog Devices at closing. Linear Technology recently released its financial results for the second quarter of its fiscal 2017, the final report before the deal closes. The chipmaker had been considered a very attractive acquisition target in the semiconductor industry before the acquisition announcement due to its high margins and engineering talent. Jim Simons’ Renaissance Technologies was the equity holder of 8.71 million shares of Linear Technology Corporation (NASDAQ:LLTC) at the end of September.

Ex-CEO of TD Ameritrade Sells Shares Amid Post-Election Jump in Trading Volume

The former Chief Executive Officer of TD Ameritrade Holding Corp. (NASDAQ:AMTD) discarded a sizable block of shares last week. Joseph H. Moglia, current Chairman of the Board at TD Ameritrade, liquidated 20,000 shares on Thursday at prices varying between $47.00 and $47.01 per share, cutting his ownership to 200,000 shares.

Discount brokerages, including TD Ameritrade Holding Corp. (NASDAQ:AMTD), are definitely hoping that President Donald Trump will keep tweeting after taking office. In the weeks after Donald Trump’s election, discount brokerages have enjoyed a spike in trading activity among their clients (due to increased uncertainty, volatility and “hope”), pushing commission revenue higher at a time when brokerages were struggling to raise trading fees. For instance, TD Ameritrade, a leading provider of securities brokerage services and related technology-based financial services to retail investors and traders, reported that daily average revenue trades jumped to 514,000 in the days after the election, up from 451,000 before. The post-election rise in trading volume continued into January as well. TD Ameritrade’s shares have gained 68% in the past year. Edgar Wachenheim’s Greenhaven Associates reported owning 6,840 shares of TD Ameritrade Holding Corp. (NASDAQ:AMTD) in its 13F filing for the December quarter.

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