Insider Selling at U.S. Financial Services Company, Executive at Struggling Beauty-Product Maker Buys Shares, and Other Insider Trading

Page 1 of 3

Peter Lynch, a well-known mutual fund manager, once said that Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise. Of course, the investment guru is not the only successful money manager who believes that insider buying activity conveys meaningful and positive information. A number of hedge fund vehicles incorporate insider trading metrics into their broader stock selection and analysis process as well.

Corporate insiders know a lot more about their company’s business fundamentals and future prospects than anyone else, which is why investors would be wise to keep a close eye on how insiders are trading shares. Insiders are way ahead of analysts and portfolio managers in terms of how much information they possess about their own companies. Meanwhile, the investment community appears to be ignoring insider selling activity. Most insider sales are made through trading plans or after the exercising of stock options, which makes it more difficult to pinpoint useful and informative selling. There’s a lot of noise out there created by certain so-called financial news websites featured on Google Finance that shall remain nameless. On the contrary, our daily insider trading articles feature only the most relevant insider trading activity that is not carried out through trading plans or after stock options are exercised. The following article will do just that – it will discuss a set of noteworthy insider transactions reported with the SEC on Tuesday.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see the details here).

Wall Street Stocks Market Insider Trading

Rawpixel /

Executive at Struggling Beauty-Product Maker Initiates Stake

A high-ranked executive at Coty Inc. (NYSE:COTY) initiated a new stake in the company last week. Chief Legal Officer Greerson Greene McMullen acquired a 40,500-share stake on Friday at prices between $18.48 and $18.51 per share.

The shares of the beauty-product maker have plunged by 28% in the past 12 months, which may encourage some corporate insiders to boost their equity stakes. Coty Inc. (NYSE:COTY) makes and sells branded beauty products, including fragrances, color cosmetics, hair care products and skin & body-related products. The beauty company has been struggling to absorb the acquisition of Procter & Gamble Co (NYSE:PG)’s global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands, citing larger-than-expected inventory, competitive pressure and distraction related to the integration. “That complexity of the merger, the sheer magnitude of this integration and simultaneous reorganization of our total company has impacted our organization and our short-term results,“ said the company’s CEO during a recent conference call. Adage Capital Management, founded by Phill Gross and Robert Atchinson, added a 2.26 million-share position in Coty Inc. (NYSE:COTY) to its portfolio during the fourth quarter.

Follow Coty Inc. (NYSE:COTY)

The second page of the article discusses fresh insider buying at two other companies.

Page 1 of 3