Graphics Chip Titan Registers Insider Selling; Four Other Companies with Fresh Insider Buying

In a study focused on insider trading, several researchers from top-tier U.S. universities split insider trading into two camps: predictable or routine insider trading activity that is not informative for the future of firms; and information-rich insider trading activity that contains strong predictive power. The so-called routine insider selling can be driven by diversification or liquidity reasons. For instance, insider trading watchers might have noticed that Bill Gates trades in a pre-announced, routine fashion. But why do we talk only about insider selling here?

Because only a small portion of the overall insider buying activity can be considered routine. Routine insider buying involves freshly-appointed board members or executives buying shares to meet the stock ownership guidelines put in place by most publicly traded companies. Going back to the aforementioned study, the researchers who conducted in the study found that the abnormal returns associated with routing trades were essentially zero, whereas information-rich insider transactions, called “opportunistic,” yielded value-weighted abnormal returns of 82 basis points per month. That said, the following article will discuss a set of noteworthy insider transactions reported with the SEC on Wednesday.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

Avinger’s Top-Tier Executives Purchase Shares

Two of Avinger Inc. (NASDAQ:AVGR)’s most informed executives purchased shares earlier this week. To begin with, Chief Executive Officer Jeffrey M. Soinski bought 57,100 shares on Tuesday at a price tag of $3.50 each, boosting his overall holding to 59,345 shares. Moreover, Chief Financial Officer Matthew B. Ferguson snapped up 7,000 shares on the same day for $3.50 each. After the recent purchase, Mr. Ferguson currently owns 25,754 shares.

The aforementioned shares were purchased through a public offering of 9.86 million shares, which generated around $317 million in net proceeds. The commercial-stage medical device company that designs and manufactures precision medical device technology to treat patients with peripheral artery disease plans to use the net proceeds from the offering for general corporate purposes, including working capital, capital expenditures, as well as acquisitions of complementary products, technologies or businesses. Avinger Inc. (NASDAQ:AVGR) may also use proceeds to cover a portion of its debt to “cure potential non-compliance with the covenant” in a loan agreement that requires minimum revenue of $23.0 million in 2016. Avinger has lost 80% of its market value since the beginning of the year. Royce & Associates, founded by Chuck Royce, owns nearly 597,000 shares of Avinger Inc. (NASDAQ:AVGR) as of June 30.

The next page of the article will discuss fresh insider buying registered at two companies, while the final page of the article will disclose noteworthy insider transactions recently recorded at two other companies.

COO of Financial Holding Company Buys Some Shares

One member of Fulton Financial Corp (NASDAQ:FULT)’s executive team also piled up some shares this week. Chief Operating Officer Philmer H. Rohrbaugh bought 14,000 shares on Tuesday at prices varying from $13.92 to $13.97 per share, lifting his ownership to 50,500 shares.

Fulton Financial Corp (NASDAQ:FULT) is a financial holding company comprised of six banking subsidiaries that provide retail and commercial financial services in Pennsylvania, Delaware, Maryland, New Jersey and Virginia. The company’s net income for the second quarter increased to $39.75 million from $36.68 million posted a year ago, mainly reflecting increases in net interest income due to growth in interest-earning assets and non-interest income. Fulton’s bottom-line growth was partially offset by an increase in the provision for credit losses, a decrease in investment securities gains and an increase in non-interest expenses. There were eight hedge funds followed by Insider Monkey with long positions in Fulton Financial at the end of March. The stock is up 6% year-to-date. Ken Griffin’s Citadel Advisors LLC added a 38,812-share position in Fulton Financial Corp (NASDAQ:FULT) to its pool of holdings during the June quarter.

Gencor Sees Executive Buy Stock

A top-tier executive at Gencor Industries Inc. (DE) (NASDAQ:GENC) snapped up a relatively sizable block of shares this week. Eric E. Mellen, Chief Financial Officer since May 2012, purchased 10,000 units of common stock on Wednesday at $10.75 apiece, which lifted his overall holding to 51,250 shares.

The manufacturer of heavy machinery used in the production of highway construction materials and environmental control equipment has seen its market cap jump by 48% since the start of the year. Gencor Industries Inc. (DE) (NASDAQ:GENC)’s portfolio of core products includes asphalt plants, combustion systems, and fluid heat transfer systems. The company reported net revenue of $19.86 million for the quarter that ended June 30, up from $10.94 million posted a year ago. The company’s sales of asphalt plants and related components continued to be strong as a result of the Fixing America’s Surface Transportation Act, a $305 billion-transportation bill signed by President Barack Obama in December 2015. Jim Simons’ Renaissance Technologies LLC has 118,800 shares of Gencor Industries Inc. (DE) (NASDAQ:GENC) in its portfolio as of the end of the second quarter.

Let’s head to the second page of this article, where we will discuss fresh insider buying witnessed at one company and noteworthy selling at another company.

Board Member of Cross Country Healthcare Purchases Shares

One member of Cross Country Healthcare Inc. (NASDAQ:CCRN)’s board piled up some shares earlier this week. Thomas C. Dircks snatched up 10,000 shares on Wednesday at prices that fell between $10.71 and $10.77 per share. Following the recent purchase, Mr. Dircks currently holds an ownership stake of 95,264 shares.

The shares of the national leader in providing healthcare workforce solutions and staffing services are 29% in the red thus far in 2016. Cross Country Healthcare Inc. (NASDAQ:CCRN) recorded revenue from services of $199.44 million for the three months that ended June 30, up from $192.62 million posted a year ago. The increase was mainly attributable to higher revenue from the company’s Nurse and Allied Staffing business segment as a result of the Mediscan acquisition, as well as higher average bill rates. A total number of 14 asset manager from our system were invested in Cross Country Healthcare at the end of the first quarter, accumulating 7% of the company’s outstanding shares. Richard Driehaus’ Driehaus Capital cut its stake in Cross Country Healthcare Inc. (NASDAQ:CCRN) by 8% during the June quarter to around 267,000 shares.

Graphics Chip Titan’s Executive Offloads Shares after Q2 Report

NVIDIA Corporation (NASDAQ:NVDA) was one company that registered spur-of-the-moment insider selling earlier this week. Debora Shoquist, Executive Vice President of Operations, offloaded 35,476 shares on Monday at prices ranging from $62.93 to $63.19 per share. Ms. Shoquist currently owns 352,188 shares of NVIDIA following the recent sale.

The insider selling comes shortly after the graphics chip titan released stronger than anticipates financial results for the second quarter, reflecting success with the recently-introduced graphic cards. NVIDIA Corporation (NASDAQ:NVDA) has seen its market capitalization spike by 87% since the start of the year. Following the release of the second-quarter earnings report, analysts at RBC Capital Markets upgraded the chip maker to ‘Outperform’ from ‘Sector Perform’ and raised their price target on the stock to $72 from $47, saying that “the NVIDIA story has materially changed to a structural long driven by 1) deep learning, 2) automotive, and 3) virtual reality growth.” John Armitage’s Egerton Capital Limited owns 4.75 million shares of NVIDIA Corporation (NASDAQ:NVDA) as of the end of the June quarter.

Disclosure: None