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

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.

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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.

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

CEO of REIT Boosts Stake as Shares Struggle in 2017

The man in charge of Armada Hoffler Properties Inc. (NYSE:AHH) snapped up a block of shares at the beginning of the week. President and CEO Louis S. Haddad bought 15,000 shares on Monday at prices varying from $13.77 to $13.81 per share. Mr. Haddad currently owns an aggregate of 220,868 shares following the recent purchase.

The full service real estate company focused on developing and owning institutional-grade office, retail and multifamily properties in markets throughout the Mid-Atlantic United States has seen the value of its shares jump 28% in the past year. Earlier this month, Armada Hoffler Properties Inc. (NYSE:AHH)’s boardroom approved a quarterly cash dividend of $0.19 per share, which marked an increase of 5.6% over the prior quarter’s dividend. The quarterly dividend yields a spicy annual dividend yield of 5.51%. The real estate investment trust’s normalized funds from operations (FFO) – a measure of cash generated by REITs – totaled $50.9 million for 2016, up from $38.7 million recorded for the previous year. Jim Simons’ Renaissance Technologies LLC held 1.38 million shares of Armada Hoffler Properties Inc. (NYSE:AHH) at the end of December.

Executive at Low-Priced Lantronix Buys Shares Near 52-Week High

One member of Lantronix Inc. (NASDAQ:LTRX)’s management team purchased some shares at the end of the previous week. Kevin Yoder, Vice President of Worldwide Sales, bought 5,000 shares on Friday at a price tag of $2.21 each. Mr. Yoder owns 14,668 shares after the Friday transaction.

The shares of the global provider of secure data access and management solutions for Internet of Things and information technology assets have gained 135% in the past year, after rising 25% in 2017 alone. Lantronix Inc. (NASDAQ:LTRX)’s net revenue for the December quarter rose by 17.6% year-over-year to $11.22 million, primarily due to sales growth in both the IoT and IT Management product lines. More importantly, the company reported net income of $41,000 for the fourth quarter, as compared to a net loss of nearly one million recorded a year ago. The improvement in profitability was attributable to growth in net revenue, as well as a 26.7% increase in gross profit. Ken Griffin’s Citadel Advisors LLC trimmed its stake in Lantronix Inc. (NASDAQ:LTRX) by 32% to 13,448 shares during the three months ended December 31.

As usual, the final page of the article will discuss fresh insider selling observed at two other companies.

Cluster of Insider Selling at U.S. Financial Services Company

A number of corporate insiders at Ameriprise Financial Inc. (NYSE:AMP) offloaded shares during the course of the previous week, so this section will discuss a few sales. To start with, Chief Executive Officer James M. Cracchiolo discarded a total of 54,110 shares on Friday at prices between $123.45 and $124.51 per share, trimming his ownership to 297,309 shares. Walter S. Berman, Chief Financial Officer and Executive Vice President, offloaded 19,000 shares a day earlier at prices ranging from $122.97 to $123.11 per share, a sale that cut his overall holding to 11,836 shares. Moreover, Joseph E. Sweeney, President – Advice & Wealth Management, Products and Service Delivery, sold 2,440 shares on Thursday at $123.70 apiece. Mr. Sweeney currently owns 15,314 shares after the Thursday sale.

The shares of the U.S. financial services company have jumped 15% year-to-date and 54% in the past year alone, which could explain the spike in insider selling. Ameriprise Financial Inc. (NYSE:AMP) recently reported operating net revenues of $2.9 billion for the December quarter, which decreased by 1% year-over-year. Strong net revenue growth in Advice & Wealth Management due to growth in client assets was offset by lower Asset Management revenue, reflecting outflows, foreign exchange translation and high performance fees a year ago. Daniel S. Och’s OZ Management added a 250,000-share position in Ameriprise Financial Inc. (NYSE:AMP) to its pool of holdings during the fourth quarter.

Executive at High-Flying Iteris Sell Out Entire Stake

One member of Iteris Inc. (NASDAQ:ITI)’s executive team liquidated his entire ownership stake at the beginning of the week. Thomas N. Blair, Senior Vice President of Performance Analytics since July 2012, sold out his entire stake of 32,925 shares on Monday at prices varying from $4.90 to $5.02 per share.

Iteris Inc. (NASDAQ:ITI), a leader in applied informatics for transportation and agriculture, has seen its market capitalization increase by 124% in the past year, which was what possibly encouraged the executive to sell shares. The main driver of the company’s growth represents spending and Iteris’ management says there is a shift in transportation infrastructure spending already. The company’s total revenue for the quarter that ended December increased by 19% year-on-year to $22.7 million. Nonetheless, Iteris reported a wider operating loss than a year ago, posting $1.5 million in operating loss versus $1.1 million in the same quarter of the previous year. Renaissance Technologies LLC owns 649,100 shares of Iteris Inc. (NASDAQ:ITI) as of December 31.

Disclosure: None