Insider trading involves the buying and selling of securities by someone who has access to material non-public information about those securities. Rules imposed by the U.S. Securities and Exchange Commission were designed to guard against corporate insiders unfairly profiting from material corporate information that has not been made public just yet.
Even though most Board members and executives play by the rules imposed by the SEC when buying and selling securities of their companies, insiders still have a clear edge over other stock market participants when it comes to the knowledge and understanding of their company’s business and future prospects. A fresh study completed by several researchers from top-tier U.S. universities concluded that “opportunistic” trades (i.e. trades that are not part of a regular pattern of trading) made by corporate insiders generate a much higher rate of return than “routine” trades. Without further ado, let’s have a look at a set of noteworthy spur-of-the-moment insider transactions reported with the SEC on the last trading session of the previous week.
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Founder and CEO of Life Sciences Software Vendor Buys Shares
To start with, the man in charge of Model N Inc. (NYSE:MODN) purchased a block of shares last week. Chief Executive Officer Zack Rinat, who founded Model N in December 1999, snapped up 2,905 shares on Friday at prices ranging from $9.85 to $10.10 per share, a small block of shares held by GADD Inc. – owned entirely by the Rinat Family 2006 Trust. Mr. Rinat owns 26,907 shares through GADD, holds an additional direct ownership stake of 2.29 million shares, as well as owns 3.07 million shares through various trusts.
The purchase comes shortly after the life sciences cloud computing-based software vendor released the financial results for its first quarter of fiscal 2017 that ended December 31. Model N Inc. (NYSE:MODN) revenue totaled $28.1 million for the three months that ended December, up 15% year-over-year. Meanwhile, the company’s net loss slightly decreased to $7.6 million from $7.8 million reported a year ago, as the enterprise software operator has undertaken efforts to realize cost efficiencies and accelerate its path to profitability and cash flow generation. Model N also revised upward its sales guidance for fiscal 2017 to a range of $130 million-to-$134 million. The shares of the enterprise software operator are up 5% in the past 12 months. Royce & Associates, founded by Chuck Royce, upped its position in Model N Inc. (NYSE:MODN) by 60% during the December quarter to 467,080 shares.
The next page of the article discusses fresh insider buying observed at two other companies.