Executives Find This Toy Maker’s Shares Attractive After Stock Price Plunges, Plus Other Insider Trading

Although I may not be knowledgeable enough in the area of insider trading, it seems quite clear to me that insider trading is impossible to police. The difference between legal and illegal insider trading is quite hard to grasp; although insiders are restricted from trading on material non-public information, they do have access to vast non-material information outsiders do not have access to (e.g. the success of an ongoing marketing campaign, bottlenecks in the supply chain, etc.).

I also believe that insider buying and selling should play an important role in keeping asset prices honest. In other words, corporate insiders can help keep prices from lying to the general public about corporate realities. This means that when insiders are trading on non-public information, they cause asset prices to reflect that information sooner and hence help other market participants to make better decisions. Corporate scandals would not occur so often if the government didn’t prohibit insider trading. Indeed, it would not be reasonable and fair to allow insiders to buy shares ahead of merger announcements or other information-heavy events, as the information advantage enjoyed by insiders could discourage other investors from investing in equity markets. Therefore, regulators and companies should be selective with regard to the types of information insiders may not trade on. Companies allowing trading on insider knowledge will eventually bear a lower risk than will companies that prevent such trading. Leaving this discussion aside, let’s have a look at a fresh set of noteworthy insider transactions reported with the SEC on Wednesday.

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CEO of Battered of Home Furnishings Retailer Buys 200k Shares

To begin with, the man at the helm of Tuesday Morning Corporation (NASDAQ:TUES) bought a large amount of shares at the beginning of the week. Chief Executive Officer Steven Robert Becker snapped up 200,000 shares on Monday at $3.66 apiece, boosting his direct ownership stake to 248,402 shares. Mr. Becker also owns an indirect ownership stake of 1.24 million shares.

President and Chief Operating Officer Melissa Philips recently announced her resignation from the home furnishings retailer almost two years after being promoted to help turn around the company. Mr. Becker is assuming the responsibilities of President, while the COO position has been eliminated. At the end of the previous week, Tuesday Morning Corporation (NASDAQ:TUES) said comparable store sales increased 3.8% year-on-year in the quarter that ended December despite facing significant supply chain challenges, while net sales increased by $8.2 million year-over-year to $328.1 million despite operating 24 fewer stores. The shares of the off-price retailer specializing in selling deeply-discounted, upscale home accessories, housewares, seasonal goods and famous-maker gifts have dropped 32% in the past 12 months. Adage Capital Management, founded by Phill Gross and Robert Atchinson, owned 2.19 million shares of Tuesday Morning Corporation (NASDAQ:TUES) at the end of September.

Let’s head to the next page of this article, where we discuss fresh insider buying at two other companies.

President of Marketer of Consumer and Commercial Products Buys Shares After Revenue Guidance Cut

A high-ranked executive at Newell Brands Inc. (NYSE:NWL) also purchased a sizeable block of shares earlier this week. President Mark S. Tarchetti bought 13,000 shares on Tuesday at prices varying from $45.20 to $45.24 per share. Mr. Tarchetti currently owns a stake of 201,995 shares following the transaction.

The insider purchase comes after Newell Brands Inc. (NYSE:NWL), best known for its line of tupperware products, released disappointing financial results for the fourth quarter. More importantly, the company cut its sales outlook for 2017, reflecting exposure to the struggling brick-and-mortar retail industry. Newell Brands anticipates core sales growth in the range of 2.5%-to-4.0% for 2017, down from their initial guidance of 3.0%-to-4.0%. As already suggested above, the guidance cut reflects revised expectations on the company’s businesses with larger U.S. mall-based retail presence due to lower expectations for U.S. retail mall foot traffic. Investors will mostly focus on the company’s ability to achieve cost synergies from several large acquisitions completed in recent years. The global marketer of consumer and commercial products has seen the value of its shares increase by 32% in the past year. Iridian Asset Management, founded by David Cohen and Harold Levy, upped its position in Newell Brands Inc. (NYSE:NWL) by 45% to 5.17 million shares during the fourth quarter.

Executive at Beleaguered Toy Maker Buys Shares After Share Price Plunge

Our insider trading database shows that Mattel Inc. (NASDAQ:MAT) had not seen any insiders purchase shares since mid-2015 until this week. Richard R. Gros, Chief Human Resources Officer and Executive Vice President, acquired 9,610 shares on Tuesday at prices that fell between $26.015 and $26.020. After the Tuesday purchase, Mr. Gros currently owns an aggregate of 14,744 shares.

The shares of largest U.S. toy maker plunged in late January after the company reported quarterly earnings and revenue that fell short of analysts’ expectations. Mattel Inc. (NASDAQ:MAT)’s shares are down 14% in the past month, after experiencing one of the biggest declines on a percentage basis in the past decade or so. A difficult holiday season affected the company’s toy sales from all manufacturers, according to CEO Christopher Sinclair. Meanwhile, Barclays analysts do not believe the massive share price drop made Mattel’s shares more attractive, saying that “investors are going to focus on the sustainability of the dividend yet again which could also be an overhang.” Matthew Tewksbury’s Stevens Capital Management trimmed its position in Mattel Inc. (NASDAQ:MAT) by 26% to around 146,000 shares during the December quarter.

The final page of this insider trading article discusses insider selling at two other companies.

Executives at Medical Device Maker Offloads Shares After Releasing Fourth-Quarter Results

Two members of Boston Scientific Corporation (NYSE:BSX)’s executive team offloaded shares this week. To start with, Eric Francis Yves Thepaut, Senior Vice President and President of Europe, discarded 23,775 shares on Monday at prices that ranged between $24.93 and $24.95 per share, a sale that cut his ownership to 98,457 shares. Keith D. Dawkins, Executive Vice President and Global Chief Medical Officer, liquidated 80,783 shares on Tuesday at a weighted average price of $25.21 per share. Dr. Dawkins currently owns 75,864 shares following the sale.

The shares of the medical-technology marker are trading a few cents off their 52-week high of $25.38, after having gained 16% year-to-date. The company’s shares gained after unveiling fourth-quarter results that beat expectations. According to an analyst at BMO Capital Markets, Boston Scientific Corporation (NYSE:BSX) “ended 2016 on a very good note, and enters 2017 with a promising product pipeline and lots of momentum to avoid a sophomore slump.” The medical device maker reported sales of $2.19 billion for the fourth quarter, which increased by 11% year-over-year on a reported and operational basis. Meanwhile, Boston Scientific’s management expects 2017 sales to range from $8.675 billion-to-$8.875 billion, as compared to $8.386 billion recorded for 2016. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors owned around 70,000 shares of Boston Scientific Corporation (NYSE:BSX) at the end of 2016.

Two Insiders at Milacron Holdings Unload Shares

Several insiders at Milacron Holdings Corp (NYSE:MCRN) also trimmed their equity stakes at the beginning of the week. Chief Executive Officer Thomas J. Goeke sold 179,233 shares on Monday at $15.60 apiece, cutting his ownership stake to 60,625 shares. Board member Waters S. Davis IV offloaded 19,079 shares on the same day for $15.60 each. Mr. Davis currently owns a total of 29,776 shares following the sale.

The shares of the industrial technology company serving the plastic processing industry have gained 46% in the past 12 months. Earlier this year, Milacron Holdings Corp (NYSE:MCRN) reported preliminary results for the fourth quarter and full year that ended December. The company anticipates to report sales between $287.0 million and $289.0 million for the fourth quarter of 2016, down from $306.3 million for the same period of the previous year. Unfavorable foreign currency movements hit the company’s sales figure by $4.5 million. John A. Levin’s Levin Capital Strategies L.P. had 3.29 million shares of Milacron Holdings Corp (NYSE:MCRN) in its portfolio at the end of September.

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