Founder of Battered Medical Device Company Boosts Ownership Stake, High-Ranked Executive at FICO Sells Out Entire Stake, Plus Other Insider Trading

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.

Board Member at Harris Corporation Purchases Some Shares

One member of Harris Corporation (NYSE:HRS)’s boardroom purchased some shares last week. James F. Albaugh, who was appointed to the company’s Board of Directors in late August 2016, bought 1,000 shares on Thursday at prices varying from $104.96 to $105.00 per share. Mr. Albaugh currently owns an aggregate of 1,725 shares following the recent purchase. It is highly likely that the Board member purchased the shares to meet the company’s stock ownership guidelines, as non-employee directors at Harris are expected to own at least $500,000 worth of shares within five years after election.

At the end of January, Harris Corporation (NYSE:HRS) agreed to sell its government IT services business to an affiliate of private equity investment firm Veritas Capital for $690 million in cash. The company said the business was anticipated to generate revenue of about $1.07 billion in the fiscal year ending June. The business provides IT and engineering-managed services to U.S. government agencies, including supporting NASA’s space communications network and deep space network programs. The announced divestiture, along with the recent sale of its CapRock business, represents one of the steps in the company’s efforts to optimize its business portfolio. The shares of Harris have gained 46% in the past year. Ken Griffin’s Citadel Advisors LLC owned 39,449 shares of Harris Corporation (NYSE:HRS) at year-end.

Founder of Battered Medical Device Company Boosts Equity Stake

The man at the helm of Iradimed Corp (NASDAQ:IRMD) boosted his equity stake last week as well. President and CEO Roger E. Susi, who founded Iradimed in 2004, snatched up 5,000 shares on Wednesday for $8.55 each and 5,000 shares on Thursday at $8.65 apiece, lifting his direct ownership stake to 20,000 shares. Mr. Susi also holds an indirect ownership stake of 5.80 million shares, which are held in three different trusts.

Iradimed Corp (NASDAQ:IRMD), a single-product medical device company that designs non-magnetic intravenous infusion pump systems which allow for the administration of medication to patients during magnetic resonance imaging (MRI) procedures, has seen the value of its shares plunge by 47% in the past year. In September 2014, the company was required by the FDA to stop selling its MRI compatible infusion pump systems, saying that modifications made to software on its previously-cleared infusion pumps were “significant” and required submission of new premarket notifications. Iradimed has yet to solve the issue with the warning letter received from the FDA several years ago. Cliff Asness’ AQR Capital Management had around 55,000 shares of Iradimed Corp (NASDAQ:IRMD) in its portfolio at the end of December.

Let’s head to the last page of the article, where we discuss fresh insider selling at two other firms.

Executive at Predictive Data Analytics Company Discards Shares

Several high-ranked executives at Fair Isaac Corporation (NYSE:FICO) offloaded shares last week, though most sales were conducted under pre-arranged trading plans. Wayne Elliot Huyard, Executive President of Sales, Marketing and Services, sold out his entire stake of 24,457 shares on Friday at prices that fell between $125.75 and $125.76 per share. This was the only spur-of-the-moment sale observed at the company.

Fair Isaac Corporation (NYSE:FICO), known for giving people credit scores, has seen its market capitalization jump by 36% in the past year. The predictive data analytics company paid a quarterly dividend of $0.02 during the December quarter, which equates to an annual dividend yield of 0.06%. Considering that Fair Isaac Corporation, mostly known as FICO, generated earnings of $37.90 million in the fourth quarter, the payout ratio for the quarter totaled a mere 1.6%. Considering the strong profitability and cash flow generation of the company, some shareholders would have loved to receive a higher dividend from FICO. This might be especially true if bearing in mind that Wall Street analysts expect FICO to generate earnings per share of $3.87 in fiscal 2017 and $4.98 in 2019. Royce & Associates, founded by Chuck Royce, reported owning 645,100 shares of Fair Isaac Corporation (NYSE:FICO) through its 13F filing for the December quarter.

Board Member at Truckload Carrier Sells Shares

One member of Heartland Express Inc. (NASDAQ:HTLD)’s Board of Directors offloaded a sizeable block of shares last week. Board member Larry J. Gordon liquidated 95,386 shares on Wednesday at prices varying from $19.91 to $20.11 per share, cutting his ownership to 381,547 shares.

The shares of the short-to-medium haul truckload carrier of general commodities are 2% in the green thus far in 2017. Heartland Express Inc. (NASDAQ:HTLD) reported operating revenues of $612.9 million for 2016, which decreased from $736.3 million in 2015. The company’s top-line figure was challenged by massive pricing pressure from shippers attempting to capitalize on excess capacity in the industry. The trucking and logistics company’s net income decreased to $56.4 million from $73.1 million recorded for 2015. Ken Fisher’s Fisher Asset Management was the equity holder of 2.23 million shares of Heartland Express Inc. (NASDAQ:HTLD) at year-end.

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