Former CEO of Finish Line Inc. (FINL) Sells Shares as Underperformance Persists; Other Notable Insider Transactions

It is already common knowledge that corporate insiders are savvy long-term-oriented investors, with their purchases beating broader market benchmarks on aggregate. Similarly, past research indicates that uninformed outsiders can earn abnormal returns by imitating insiders. Insider Monkey is a strong believer of the so-called insider trading anomaly, so investors would be wise to keep track of our insider trading articles.

It is also believed that the trading behavior of those insiders who are more knowledgeable with the overall affairs of their firms, such as chairmen of boardrooms and top-tier executives, is a more successful predictor of future stock performance. Furthermore, numerous investors tend to focus on the insider trading activity registered at companies in the small- and mid-cap space, as these companies do not receive the analyst coverage of larger-cap companies such as Apple Inc. (NASDAQ:AAPL). Insider Monkey processed most Form 4 filings submitted with the SEC on Tuesday and pinned down five companies with noteworthy insider trading, most of which are small-cap firms.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Board Member at Clinical Stage Biopharmaceutical Company Initiates New Stake

A long-serving member of Acceleron Pharma Inc. (NASDAQ:XLRN)’s Board of Directors purchased a new stake last week. Joseph S. Zakrzewski, a member of the company’s board since March 2011, snapped up a new stake of 4,000 shares on Friday at a price of $25.5 each. Although the size of the purchase isn’t overly significant, the actual timing of the purchase might convey meaningful information for the investment community. After all, the Board member could have purchased shares any time since early 2011, but he initiated a new stake only at the end of 2016.

The shares of the Massachusetts-based clinical stage biopharmaceutical company were down 36% last year, which might have prompted Mr. Zakrzewski to purchase shares after serving on the boardroom for more than five years. While Acceleron Pharma Inc. (NASDAQ:XLRN) has not generated any revenue from the sale of products just yet, the company’s revenue has been derived from collaboration revenue such as license and milestone revenues and cost sharing revenue generated via collaboration and license agreements with partners for the development and commercialization of its therapeutic candidates. The company reported revenue of $3.0 million for the September quarter, as compared to $4.2 million recognized for the same period of the previous year. Peter Kolchinsky’s RA Capital Management owned a 319,000-share stake in Acceleron Pharma Inc. (NASDAQ:XLRN) at the end of the third quarter.

The final two pages of this insider trading article discusses fresh insider selling observed at four companies.

Non-Executive Chairman at Racing, Gaming and Online Entertainment Company Keeps Selling Shares

A knowledgeable insider at Churchill Downs Inc. (NASDAQ:CHDN) keeps selling shares. Non-executive Chairman Robert L. Evans, who retired as Executive Chairman and as a member of the management team in late September 2015, discarded 12,500 units of common stock on Friday at $150.0 apiece. Following the recent sale, Mr. Evans currently owns an aggregate of 127,342 shares.

The racing, gaming and online entertainment company, known for hosting famous horse race the Kentucky Derby, has seen the value of its shares gain 7% since early 2016. Churchill Downs Inc. (NASDAQ:CHDN)’s net revenue for first three quarters of 2016 increased by $90.4 million year-over-year to $1.03 billion, mainly reflecting a $69.6 million increase from Big Fish Games – a provider and distributor of social casino, casual and mid-core free-to-play, and premium paid games for PC, Mac and mobile devices. The company’s top line was also lifted by strong Kentucky Derby and Oaks week performance. There were 19 hedge funds from our system with equity stakes in Churchill Downs at the end of the September quarter, which amassed around 32% of the company’s outstanding common stock. PAR Capital Management, run by Paul Reeder and Edward Shapiro, held 1.42 million shares of Churchill Downs Inc. (NASDAQ:CHDN) on September 30.

Executive at Transforming REIT Sells Shares Presumably Due to Spin-off Plans

One member of Vornado Realty Trust (NYSE:VNO)’s executive team also offloaded some shares during the last trading days of 2016. Mitchell N. Schear, the President of Vornado/Charles E. Smith, offloaded 15,000 shares on Thursday at prices varying from $102.34 to $102.95 per share, cutting his overall holding to 63,877 shares.

In late October, landlord Vornado Realty Trust (NYSE:VNO)’s boardroom approved a tax-free spin-off of its Washington, DC business, known as Vornado/Charles E. Smith, into a new company that is set to be merged with the business and certain assets of a real estate company called the JBG Companies. The deal will create a landlord with a significant presence in the Washington area, aggregating around 11.8 million square feet of office space and more than 4,400 apartments. The company’s management believes the planned spin-off of the D.C. portfolio represents a “no-brainer”, allowing the real estate investment trust to retain an interest in D.C.’s office market without committing a great deal of attention to the market. Vornado shares were 5% in the green last year. John A. Levin’s Levin Capital Strategies reported ownership of 284,000 shares of Vornado Realty Trust (NYSE:VNO) in its 13F filing for the third quarter.

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

Former CEO of Athletic Retailer Sells Shares as Underperformance Persists

A member of Finish Line Inc. (NASDAQ:FINL)’s boardroom discarded a sizeable block of shares last week. Non-Executive Chairman Glenn S. Lyon, who served as the Chief Executive Officer of Finish Line and its stores until being replaced by then President Sam Sato in early 2016, liquidated 75,000 Class A shares on Thursday at a price tag of $18.89 per share. Following the sizeable sale, Mr. Lyon currently owns a total of 117,088 shares.

On December 21, the athletic retailer released a disappointing earnings report for the third quarter and issued disappointing guidance, as the company continues to underperform in the athletic category when consumer enthusiasm for activewear continues to thrive. Although Finish Line Inc. (NASDAQ:FINL) started to roll-out a new store format, trim costs and announced plans to sell underperforming assets such as the JackRabbit business, analysts claim that the management’s efforts to improve merchandise and product flow have not yielded the desired results consistently. Credit Suisse analysts recently cut their price target on the athletic retailer to $19 from $23, citing weak underlying comps despite a reasonably healthy athletic environment. Steve Cohen’s Point72 Asset Management owned 250,000 shares of Finish Line Inc. (NASDAQ:FINL) at the end of the third quarter.

CFO of Provider of Internet Access and IP Communications Services Unloads Shares

Last but not least, an executive at Cogent Communications Holdings Inc. (NASDAQ:CCOI) also discarded some shares last week. Chief Financial Officer and Treasurer Thaddeus G. Weed unloaded 20,000 shares on Tuesday at a price of $41.52 per share, a sale that trimmed his ownership to 67,250 shares.

The shares of the facilities-based provider of low-cost, high-speed Internet access and IP communications services were up 22% in 2016. In late October, Cogent Communications Holdings Inc. (NASDAQ:CCOI)’s boardroom approved a quarterly dividend of $0.40 per share, which equates to an annual dividend yield of 3.82%. The company’s service revenue increased 10.8% for the first nine months of 2016 to $331.30 million. The 16 asset managers within our database invested in Cogent accumulated 9% of the company’s outstanding common stock. Jim Simons’ Renaissance Technologies LLC had 1.48 million shares of Cogent Communications Holdings Inc. (NASDAQ:CCOI) in its 13F portfolio at the end of September.

Disclosure: None