Insider Selling at Ford Motor Company (F), Plus Insider Buying at Four Other Companies

Insider trading can be either legal or illegal. The illegal kind of insider trading occurs when corporate insiders or other individuals buy or sell securities based on “inside” information that is not available to the general public. It is quite evident why the U.S. Securities and Exchange Commission is fighting heavy battles to put those trading on “inside” information in prison. At the end of the day, illegal insider trading puts the average investor at a disadvantage, simultaneously reducing both public trust and confidence in financial markets. In other words, insider trading deters regular investors from entering the market. So why doesn’t the SEC ban all corporate insiders from buying securities (insiders should be allowed to sell their exercised stock options and stock awards)?

Chief executive officers and other top-tier executives posses material “inside” information much of the time, so their insider purchases could always be classified as illegal. Some do not consider that insider trading on non-public information is wrong and should be punished. After all, it could be argued that insider trading is valuable because it increases the available information about a company, which in turn makes markets efficient. Hence, one possible answer to the question stated above might relate to market efficiency. Leaving this discussion aside, let’s have a look at a set of notable insider transactions reported with the SEC on Thursday.

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).

CEO of Medley Capital Purchases Two Sizeable Blocks of Shares

The man in charge of Medley Capital Corp (NYSE:MCC) filed Thursday to disclose the purchase of company stock. Brook Taube, the Chief Executive Officer and Chairman of the Board of Directors of Medley Capital, reported purchasing 35,500 shares on Tuesday and 79,600 shares on Thursday at prices that ranged from $7.57 to $7.60 per share. The shares are held by a limited liability company controlled by Medley LLC that currently owns 1.31 million shares of Medley Capital. Brook Taube and his twin brother Seth Taube control Medley LLC.

The shares of the closed-end management investment company, whose business operations involve lending to privately-held middle market companies, are up a little less than 1% since the start of the year. In early August, Medley Capital Corp (NYSE:MCC)’s Board of Directors reduced the quarterly dividend to $0.22 from $0.30, after the company’s net investment income for the June quarter fell to $10.96 million from $17.24 million reported for the same period of the prior year. Despite the massive dividend cut, the $0.22-per-share dividend yields 11.61% annually. Nathaniel August’s Mangrove Partners reported ownership of 379,264 shares of Medley Capital Corp (NYSE:MCC) in its 13F filing for the second quarter.

The next two pages of this insider trading article discuss another set of insider transactions reported with the SEC on Thursday.

Mini-Cluster of Insider Buying at Expanding Oil and Natural Gas Company

Two different insiders at Synergy Resources Corp (NYSEMKT:SYRG) purchased shares this week. To begin with, President and Chief Executive Officer Lynn A. Peterson bought 49,071 shares on Thursday at $6.00 apiece, a purchase that lifted his ownership stake to 489,367 shares. According to the filing that disclosed the purchase, this was a privately negotiated purchase transaction. Moreover, Board member Daniel E. Kelly acquired 15,000 shares a day earlier for $6.49 each. After the recent purchase, Mr. Kelly currently holds an ownership stake of 31,272 shares.

The growth-oriented independent oil and natural gas company has seen the value of its shares decline by 21% this year. Synergy Resources Corp (NYSEMKT:SYRG) engages in the acquisition, development and production of crude oil and natural gas in the D-J Basin, viewed as one of the premier, liquids-rich oil and gas resource plays in the United States. In late September, analysts at RBC Capital Markets initiated coverage on Synergy Resources with an ‘Outperform’ rating and a price target of $9, saying that the company’s “upgraded core Wattenberg Fairway asset base and robust production growth story remain underappreciated in our view”. In early May, Synergy Resources agreed to acquire around 72,000 gross acres in the area referred to as the Greeley-Crescent project in the Wattenberg Field for $505 million. Debra Fine’s Fine Capital Partners was the owner of 6.14 million shares of Synergy Resources Corp (NYSEMKT:SYRG) at the end of the second quarter.

CEO of Transitioning REIT Purchases Shares

Although Insider Monkey already discussed some insider buying at Investors Real Estate Trust (NYSE:IRET) this week, the insider buying reported with the SEC on Thursday could not be ignored by any means. Timothy P. Mihalick, the CEO of the equity real estate investment trust, snatched up 22,500 shares on Thursday at a price tag of $5.73 per share. Following the recent transaction, Mr. Mihalick currently owns 318,408 shares.

As mentioned in our previous articles, Investors Real Estate Trust (NYSE:IRET) has been undergoing a transition towards a pure-play multifamily REIT in recent months. The company’s real estate properties comprise multifamily, healthcare and other properties located in the upper Midwest states of Minnesota and North Dakota. The demand for investment and institutional quality real estate in the REIT’s markets has been strong according to a recent filing. However, the company has been facing some challenges in an energy-impacted market, where Investors Real Estate Trust experienced very high vacancies that forced the company to offer rent concessions to attract residents. Ken Griffin’s Citadel Advisors LLC had around 249,000 shares of Investors Real Estate Trust (NYSE:IRET) among its holdings at the end of June.

The final page of this article discusses several insider transactions observed at two other companies.

CEO and Board Member of Owner and Franchisor of Restaurants Purchases Shares

Two different insiders at low-priced Chanticleer Holdings Inc. (NASDAQ:HOTR) purchased some shares last week. Gregory E. Kraut, recently appointed to the company’s Board of Directors, snapped up 7,000 shares last Wednesday for $0.56 each, lifting his overall holding to 182,623 shares. CEO and President Gregory E. Kraut bought 400 shares on the same day at $0.58 apiece, all of which are held in his Individual Retirement Account (currently holds 6,200 shares of Chanticleer). Mr. Kraut also holds a direct ownership stake of 172,251 shares.

The owner, operator and franchisor of multiple branded restaurants in the United States and abroad has seen its market cap drop by 49% thus far in 2016. Chanticleer Holdings Inc. (NASDAQ:HOTR)’s revenue for the first six months of 2016 totaled $20.9 million, an increase of 38.0% year-over-year. In June, the company approved a plan to exist the Australia and Eastern Europe markets. As a result, Chanticleer Holdings agreed on a plan to sell or close its five Hooters stores in Australia, as well as one store in the capital of Hungary. Ken Griffin’s Citadel Advisors LLC acquired a new stake of 34,851 shares of Chanticleer Holdings Inc. (NASDAQ:HOTR) during the second quarter.

Executive at Well-Known Automaker Sells Shares

One member of Ford Motor Company (NYSE:F)’s executive team discarded a sizeable block of shares this week. Executive Vice President Sankar S. Nair liquidated 82,000 shares on Tuesday at prices varying from $12.10 to $12.12 per share. After the recent sale, Mr. Nair currently owns 32,969 shares.

The shares of the manufacturer of Ford cars, trucks, SUVs, and electrified vehicles, as well as Lincoln luxury vehicles are 12% in the red this year. Earlier this month, major automakers, including Ford Motor Company (NYSE:F), posted September U.S. sales that were slightly lower relative to the same period of the previous year. Overall Ford U.S. September sales totaled 204,447 vehicles, a worrying 8% drop versus the figure recorded a year ago. However, September was the best month in 2016 for Ford’s F-Series pickup truck although sales were down 3% year-over-year to 67,809 vehicles. While the number of funds from our system with equity stakes in Ford Motor declined to 31 from 33 during the April-to-June quarter, the overall value of those stakes jumped to $685.19 million from $613.63 million. Ric Dillon’s Diamond Hill Capital added a 11.13 million-share position in Ford Motor Company (NYSE:F) to its portfolio during the second quarter.

Disclosure: None