Insider Buying at 3 Companies Amid Historically Low Insider Buying, Plus Insider Selling at 2 Companies

According to research firm TrimTabs, the dollar volume of insider buying from early-October through the end of last week stood at about $110 million, representing the lowest monthly total in the past five years. As the Chief Executive Officer at TrimTabs said in a recent note, “the best-informed market participants seem unenthusiastic about U.S. stocks at current prices.”

One could argue that the ongoing third-quarter earnings season explains the historically low volume of insider buying this October. However, TrimTabs asserts the weakness in insider buying is not just seasonal. For the first 15 trading days of October, the dollar volume of insider buying was $390 million in 2012, $360 million in 2013, $540 million in 2014, and $260 million in 2015. The somewhat better-than-expected third-quarter earnings season could actually explain the relatively low volume of insider buying. According to FactSet, 78% of S&P 500 companies reported bottom-line results above expectations. As corporate insiders are usually known for following the pattern of buying low and selling high, the positive earnings season thus far does seem to partially explain the weak insider buying. Without further ado, let’s have a look at a set of noteworthy insider transactions reported with the SEC on Tuesday, which does include some insider purchases.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details).

Board Member of Biotech Company Buys Shares Via Public Offering

Let’s kick off our discussion by examining the recent insider buying activity observed at Nektar Therapeutics (NASDAQ:NKTR). R. Scott Greer, who joined the company’s Board of Directors in early-February 2010, purchased 15,000 shares on Monday at a price tag of $13.50 each. Following the recent purchase, Mr. Greer currently owns an aggregate of 121,333 shares.

It appears that the Board member purchased the shares through a secondary offering of common stock, even though the Form 4 does not explicitly say as much. The biopharmaceutical company recently offered 13 million shares to the public at a price of $13.50 per share, raising around $175.5 million. In late-September, analysts at Brean Capital initiated coverage on Nektar Therapeutics (NASDAQ:NKTR) with a ‘Buy’ rating and a price target of $23, citing its strong growth in royalties from recent and future new launches.

“In our view, Nektar’s products from recent/future launches that are likely to generate the most upside are: Movantik, Adynovate and Amikacin Inhale product,” said Brean Capital analysts in a note.

Movantik is an oral peripherally-acting opioid antagonist for the treatment of opioid-induced constipation, marketed in the United States by AstraZeneca plc (ADR) (NYSE:AZN). The drug was the first of Nektar’s proprietary drug candidates to be approved. The shares of the biotech company are 24% in the red this year. Cupps Capital Management, founded by Drew Cupps, cut its stake in Nektar Therapeutics (NASDAQ:NKTR) by 20% during the September quarter, to 135,403 shares.

The next two pages of this insider trading article will discuss several insider transactions reported with the SEC on Tuesday.

CEO of Leader in Ocean Wave Power Buys Shares

The man in charge of Ocean Power Technologies Inc. (NASDAQ:OPTT) purchased some shares this week. President and CEO George H. Kirby III snapped up 6,300 shares on Monday at a price of $3.16 per share, lifting his overall holding to 79,550 shares. The CEO purchased shares at prices below the $1-level in the second-half of 2015, which shows some of the progress they have since made, though they are well off their 52-week highs of over $15 reached earlier this year.

The shares of the leader in ocean wave power skyrocketed in July after the company installed its first power-generating buoy designed for commercial use. Ocean Power Technologies Inc. (NASDAQ:OPTT) develops and seeks to commercialize its proprietary systems that generate electricity by harnessing the renewable energy of ocean waves. The company’s current PowerBuoy product, the PB3, incorporates a power take-off and onboard system for energy storage and management. The aforementioned deployment was set to demonstrate the commercial potential of the technology for possible applications in powering ocean monitoring stations, offshore oil and natural gas operations, and defense and communications systems. Although the stock has lost a great deal of value since July, Ocean Power shares are still up by 59% year-to-date. Jim Simons’ Renaissance Technologies was the owner of 57,170 shares of Ocean Power Technologies Inc. (NASDAQ:OPTT) at the end of the second quarter.

CEO of Specialty Rental Services Company Buys Shares Before Earnings Release

The most influential executive at General Finance Corporation (NASDAQ:GFN) purchased some shares last week. Ronald F. Valenta, the Chief Executive Officer of General Finance since mid-October 2005, bought 8,000 shares on Friday at a price of $4.25 per share. The shares are held by PV Realty LLC, a California limited liability company over which Mr. Valenta exercises voting and investment control. After the recent acquisition, Mr. Valenta owns 4.47 million shares via the limited liability company.

The specialty rental services company that offers portable storage, modular space and liquid containment solutions has seen its market capitalization increase by 6% since the beginning of the year. Interestingly enough, the aforementioned insider purchase comes shortly before General Finance Corporation (NASDAQ:GFN)’s release of its financial results for the first quarter of its fiscal year 2017 ended September 30. The company is set to release the earnings report on November 7 before the market opens. General Finance Corporation’s revenue for its fiscal 2016 year ended June 30 was $285.9 million, down from $303.8 million reported for its previous fiscal year. Renaissance Technologies had around 25,900 shares of General Finance Corporation (NASDAQ:GFN) in its portfolio at the end of the June quarter.

The final page of this article will discuss fresh insider selling observed at two companies.

Insiders at Software Company Offload Shares After Release of Strong Earnings Report

Two different insiders at Citrix Systems Inc. (NASDAQ:CTXS) have discarded shares over the past several trading sessions. To start with, Chris S. Hylen, Senior Vice President and General Manager of Mobility Apps at Citrix Systems, sold 2,250 shares on Tuesday at a weighted average price of $84.82 per share, cutting his overall holding to 37,657 shares. Moreover, the software company’s Executive Chairman, Robert Calderoni, offloaded 19,888 shares on Friday at prices varying from $85.75 to $85.90 per share, a sale that trimmed his ownership stake to 124,454 shares.

Mr. Calderoni was made Executive Chairman last July after activist hedge fund Elliott Management took at 7.1% stake in the company. In June 2015, the activist hedge fund led by Paul Singer sent a letter to the company’s former CEO urging changes and the sale of some of its assets, arguing that the company’s shares could reach $100, when they were then trading at around $65 per share. While they have yet to reach that level, they have touched the $90 mark and are up by 11% this year.

The insider selling comes shortly after Citrix Systems Inc. (NASDAQ:CTXS) released better-than-expected results for the quarter ended September 30 and raised its outlook for the year. The company’s revenue for the quarter rose by 3.4% year-over-year to $841 million, a figure that beat analysts’ expectations of $827 million. Algert Coldiron Investors, founded by Peter Algert and Kevin Coldiron, reported ownership of around 18,000 shares of Citrix Systems Inc. (NASDAQ:CTXS) through the 13F filing period for the September quarter.

Board Member of Mesa Laboratories Sells Shares

One member of Mesa Laboratories Inc. (NASDAQ:MLAB)’s Board sold some shares this past week. H. Stuart Campbell, Chairman of the company’s Board of Directors, liquidated 4,000 shares on Friday at $119.02 apiece. Following the recent sale, Mr. Campbell currently holds an ownership stake of 63,930 shares.

The market value of the developer and manufacturer of quality control instruments and disposable products has increased by 25% since the start of the year. In early-August, Mesa Laboratories Inc. (NASDAQ:MLAB) purchased the CC Gels business from Rapid Aid Corporation, the business that operated as the exclusive supplier of cold chain packaging gel products for Mesa. Mesa Laboratories uses CC Gels in its validated cold chain packaging solutions sold to the pharmaceutical and life sciences industries. At the beginning of October, the company’s Board approved a quarterly dividend of $0.16 per share, which equates to an annual dividend yield of 0.51%. Royce & Associates, founded by Chuck Royce, owned 54,000 shares of Mesa Laboratories Inc. (NASDAQ:MLAB) on June 30.

Disclosure: None