Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Insider Selling at Exxon Mobil, Insider Buying at Legg Mason, Plus Notable Insider Activity at 3 Other Companies

The top-tier executives of all publicly-traded companies have access to information an analyst or investor could only dream of, which partially explains why corporate insiders’ purchases tend to outperform stock market benchmarks by a wide margin. Nejat Seyhun, a widely-known researcher in the field of insider trading and professor at the University of Michigan, found that executives’ purchases of their own companies’ stock tend to outperform the market by nearly 9% over the subsequent 12 months. Similarly, the researcher found that when executives sold shares, their companies’ stock underperformed the broader market by 5.4%. While Mr. Seyhun’s work is somewhat outdated now, there have been recent studies that presented similar conclusions. Having this in mind, the following article will discuss several noteworthy insider transactions registered at five companies in the past several trading sessions. Precisely, we will have a look at three companies that recorded notable insider selling, as well as two companies with mild insider buying.

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).

Exxon Mobil Corporation (NYSE:XOM), Sign, headquarters, Logo, Symbol, Building, Gas, Oil

Katherine Welles /

Board Member Buys Shares of Promising Biopharmaceutical Company

Axel Bolte, a Board member of Ophthotech Corp (NASDAQ:OPHT), purchased 3,500 shares on Friday at a price of $56.97 per share. After the recent purchase, Mr. Bolte currently holds ownership of 6,000 shares.

The biopharmaceutical company focused on developing novel therapeutics for the treatment of diseases of the back of the eye, particularly for age-related macular degeneration (AMD), has seen its shares gain 29% in the past three months, though the stock is still 27% in the red year-to-date. Ophthotech Corp (NASDAQ:OPHT)’s most advanced candidate, Fovista, is being studied in Phase 3 clinical trials for use alongside anti-VEGF drugs used for the treatment of wet AMD. Assuming the company’s trials yield positive results, Fovista could turn into an add-on therapy that would benefit from the fast-increasing sales of existing drugs for the treatment of vision loss caused by AMD. Steve Cohen’s Point72 Asset Management acquired a new stake of 414,400 shares of Ophthotech Corp (NASDAQ:OPHT) during the March quarter.

Follow Iveric Bio Inc. (NASDAQ:ISEE)
Trade (NASDAQ:ISEE) Now!

Long-Time Legg Mason Director Initiates Stake 

Carol A. “John” Davidson, a Board member of Legg Mason Inc. (NYSE:LM) since early-May 2014, acquired a new stake of 3,000 shares on Monday for $33.92 each. While this insider activity doesn’t represent a cluster of insider buying, which is the kind of insider buying investors should look for, Mr. Davidson’s purchase does represent an important piece of information. The Director could have initiated a stake at any time over the past two years, but did not do so until now.

The shares of the global asset management firm are down by 11% in 2016 and by 35% over the past 12 months, which partly explains the aforementioned insider trading activity. As active investment management is slowly dying, Legg Mason Inc. (NYSE:LM) has been trying to expand the reach of its operations into the exchange-traded fund marketplace. In late January, the company acquired a minority equity position in Precidian Investments LLC, a firm with strong expertise on the ETF marketplace, with the sole purpose of partnering with Precidian to create new products and offerings. Nelson Peltz’s Trian Partners holds an 11.04 million-share position in Legg Mason Inc. (NYSE:LM) as of March 31.

Follow Legg Mason Inc. (NYSE:LM)
Trade (NYSE:LM) Now!

The next page of this article will discuss notable insider transactions registered at three other companies.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.