Eye-Catching Insider Selling at Ross Stores, Celgene Corporation, Copart; Two Other Companies Register Insider Buying

Extensive research shows that corporate insiders tend to make more profit-generating trades than the average non-insider, which serves as the primary reason Insider Monkey, retail investors, analysts and hedge funds have been keeping track of insider trading metrics for years. However, insider selling does not necessarily represent a bearish or negative signal; this kind of insider trading activity needs to be interpreted with high caution.

After all, corporate insiders may cash out holdings for cash needs, tax payments or other reasons unrelated to their companies’ current fundamentals or future prospects. Hence, Insider Monkey does not recommend acting or trading immediately on each freshly-detected insider sale, but rather attempt to complete a more thorough analysis of the companies witnessing insider selling to clarify whether insider sales are indeed cause for concern. In other words, the analysis of insider selling should merely serve as a tool in assessing the potential of a stock. That said, the following article will discuss a set of noteworthy insider sales reported with the SEC on Monday, as well as discuss some mild insider buying observed at two other companies.

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

CSO and CFO of Battered Biotechnology Company Purchase Shares

Two top-tier executives at Applied Genetic Technologies Corp (NASDAQ:AGTC) purchased shares in the past few weeks. To start with, Chief Scientific Officer Mark S. Shearman purchased a new stake of 3,000 shares on Thursday at a weighted average price of $8.87 per share. Lawrence E. Bullock, Chief Financial Officer since February 2014, snapped up a 10,000-share stake last Monday at a price tag of $8.75 each.

The clinical-stage biotechnology company that uses gene therapy to develop genetic therapies to treat patients with inherited diseases has seen the value of its shares plunge by 56% since the start of the year. Applied Genetic Technologies Corp (NASDAQ:AGTC)’s shares took a serious hit earlier this month, when the company released its financial results for its fiscal-fourth-quarter that ended June 30 and simultaneously provided updates on its ongoing clinical trials. The negative reaction from Wall Street appears to have been related to the company’s clinical updates. The company’s most advanced products are being developed to deal with three inherited orphan diseases of the eye that are caused by mutations in single genes that impact visual functions. Jim Simons’ Renaissance Technologies LLC owned 119,600 shares of Applied Genetic Technologies Corp (NASDAQ:AGTC) at the end of the second quarter.

The next two pages of this article will discuss a number of other insider transactions reported with the SEC on Monday.

CEO and CFO of Low-Priced Biopharmaceutical Company Acquire New Stakes

Two of the most influential executives at Neuralstem Inc. (NASDAQ:CUR) bought shares this past week. Jonathan Brian Lloyd, Chief Financial Officer since mid-May 2015, acquired a new stake of 31,250 shares on Friday at $0.32 apiece. Richard J. Daly, appointed as President and Chief Executive Officer in February of 2016, also snatched up a new stake of 31,250 shares for $0.32 each. Both the CFO and the CEO acquired the shares in private transactions directly from the company.

The shares of the biopharmaceutical company focused on the development of central nervous system therapies based on its neural stem cell technology are up 18% thus far in 2016. Neuralstem Inc. (NASDAQ:CUR)’s patented technology facilitates the production of various types of central nervous system stem cells, which are being developed for the treatment of central nervous system diseases and conditions. There were a mere three hedge funds followed by Insider Monkey with equity stakes in Neuralstem at the end of June, hoarding up around 7% of the company’s total number of outstanding shares. Hal Mintz’s Sabby Capital added a 6.50 million-share stake in Neuralstem Inc. (NASDAQ:CUR) to its pool of holdings during the April-to-June quarter.

Influential Executives at Online Re-Marketer of Vehicle Discard Shares

Several top-tier members of Copart Inc. (NASDAQ:CPRT)’s management team discarded a great deal of shares last week. Vincent W. Mitz, President of Copart since February 2010, liquidated 138,875 shares on Thursday at prices varying from $52.85 to $53.57 per share, cutting his direct ownership stake to 123,830 shares. Mr. Mitz also sold out an entire stake of 61,125 shares held through the KMM Investment Trust at prices that fell in the range of $53.37 and $54.00 per share. More importantly, Chief Executive Officer A. Jayson Adair sold 84,967 shares on Thursday and 115,033 shares on Friday at prices ranging from $53.00 to $54.12 per share. The freshly-sold shares were held indirectly through the A. Jayson Adair and Tammi L. Adair Revocable Trust, which currently owns 3.99 million shares.

The fresh insider selling comes shortly after the provider of online auctions and vehicle remarketing activities released its financial results for the quarter and year that ended July 31. Copart Inc. (NASDAQ:CPRT) reported revenue of $1.3 billion for its recently-completed fiscal year, marking an increase of 10.7% year-over-year. Meanwhile, the company’s bottom line jumped by 23.0% year-over-year to $270.4 million. The leading online re-marketer of vehicles has seen its market capitalization rise by an impressive 41% since the start of the year. Royce & Associates, founded by Chuck Royce, was the owner of 2.41 million shares of Copart Inc. (NASDAQ:CPRT) at the end of June.

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

Board Member of Giant Biotechnology Company Sells Shares

The volume of insider selling at Celgene Corporation (NASDAQ:CELG) was relatively high this past week, although some insiders solely sold freshly-exercised stock options. Ernest Mario, a member of the company’s boardroom since August 2007, discarded 15,000 shares on Friday at a price of $109.42 per share. Following the recent sale, Dr. Mario currently owns a stake of 90,058 shares.

The integrated global biopharmaceutical company reported total revenue of $2.75 billion for the three months that ended June 30, an increase of $476.5 million as compared to the same quarter of the previous year. The increase was mainly driven by continued growth in sales of REVLIMID, POMALYST/IMNOVID and OTEZLA. Celgene Corporation (NASDAQ:CELG) plans to reach $21 billion in sales in 2020, with REVLIMID – a drug that modifies the body’s immune system to fight cancer – serving as one of the main growth engines. The $21 billion-figure compares with an estimated $11.1 billion in 2016. Ken Griffin’s Citadel Advisors LLC reported ownership of around 593,000 shares of Celgene Corporation (NASDAQ:CELG) in its 13F for the second quarter.

CEO of Ross Stores Sells Two Blocks of Shares

The person in charge of Ross Stores Inc. (NASDAQ:ROST) liquidated two sizeable blocks of shares last week. Chief Executive Officer Barbara Rentler discarded 12,840 shares on Thursday and 20,000 shares last Monday at prices that fell in the range of $62.50 and $63.80 per share. After the recent transactions, Ms. Rentler currently owns 542,851 shares of Ross Stores.

Ross Stores Inc. (NASDAQ:ROST), which operates two brands of off-price retail apparel and home fashion stores: Ross Dress for Less (“Ross”) and dd’s DISCOUNTS, has seen the value of its stock gain 18% year-to-date. Ross represents the largest off-price apparel and home fashion chain in the United States. In mid-August, analysts at Wedbush reiterated their ‘Outperform’ rating on Ross Stores and increased their price target on the stock to $67 from $65, saying that “with comps back on track, market share gains continuing, gross margins moving higher, and still room for execution improvement in 2H, we remain constructive on ROST’s near-term and long-term outlook.”  Arron Cowen’s Suvretta Capital Management owns 1.16 million shares of Ross Stores Inc. (NASDAQ:ROST) as of June 30.

Disclosure: None