Heavy Insider Selling at Pioneer Natural Resources (PXD), BNY Mellon (BK), Graphic Packaging (GPK)

BNY Mellon Has Influential Executive Sell Shares

Bank of New York Mellon Corp (NYSE:BK) also witnessed notable insider selling activity last week, after the first insider sale of the company’s shares was recorded in 2016. Mitchell E. Harris, Chief Executive Officer of Investment Management, offloaded 19,295 units of common stock on Thursday at prices varying from $40.65 to $40.69 per unit, trimming his overall holding to 194,689 units.

The shares of the custodian bank are 4% in the red year-to-date despite having gained 13% in the past three months. The 13% gain has been partly driven by the company’s strong first quarter earnings report, which reflected the positive impact of the Federal Reserve’s decision to increase short-term interest rates for the first time in almost a decade in December. Bank of New York Mellon recorded first quarter net income of $804 million, up from $766 million reported for the first quarter of 2015. Higher interest rates resulted in higher income from investments and also enabled the company to re-impose management fees that had been waived on money market funds.

Trian Fund Management L.P., founded and run by Nelson Peltz, owns roughly 3% of BNY Mellon and has its Chief Investment Officer and founding partner Edward P. Garden on the bank’s Board. “BNY Mellon is an industry leader with attractive businesses and great potential” the activist fund declared back in December 2014, when Mr. Garden was appointed to the Board.

BNY Mellon’s shares are priced at 11.8-times expected earnings, below the forward P/E multiple of 13.8 for the asset management and custody banks sector. A total of 49 hedge funds in our database had stakes in BNY Mellon at the end of December, amassing 13% of the bank’s outstanding shares. Ray Carroll’s Breton Hill Capital owns 40,621 shares of the company as of the end of March.

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