Insider Selling at UnitedHealth Group Inc. (UNH), Plus Insider Buying at 4 Other Companies

As traders and other stock market participants were coming back from the Labor Day holiday, it’s no surprise that both insider trading activity and liquidity have been improving as of late. Corporate insiders are required by the Securities and Exchange Commission to file Form 4s showing their recently-completed insider purchases and sales within two business days, making it extremely efficient to track insider trading behavior.

A great deal of academic research has shown that corporate insiders’ purchases tend to beat broader market benchmarks by a wide margin. More importantly, various research studies have also concluded that outsiders can outperform the market in the range of 6%-to-11% per year by simply following the footsteps of corporate insiders. Although changes in rules related to the submission of Form 4 filings might have had a negative impact on the so-called ‘insider trading anomaly’, retail investors would do wise to keep track of insider trading behavior. Without further ado, the following article will discuss a set of noteworthy insider transactions reported with the SEC on Friday.

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

Six Different Insiders at MLP Participate in Public Offering

Let’s kick off our discussion by looking at a cluster of insider buying registered at Western Refining Logistics LP (NYSE:WNRL), a cluster that involved six different corporate insiders. Although the six insiders purchased the shares through an underwritten public offering, we will still have a look at the most sizable purchases. To begin with, Paul L. Foster, Chairman of the company’s Board of Directors, snapped up 268,817 shares on Thursday at a price of $22.32 per share, lifting his overall holding to 799,380 shares. More importantly, President and Chief Executive Officer Jeff A. Stevens bought 134,408 shares at a cost of $22.32 per share, which boosted his ownership to 410,691 shares. Board member Scott D. Weaver acquired 44,802 shares through the public offering, which lifted his stake to 120,269 shares.

The growth-oriented master limited partnership owns and operates logistics and related assets such as terminals, storage tanks, pipelines and other logistics assets related to the terminalling, transportation, storage and distribution of crude oil and refined products. Western Refining Logistics LP (NYSE:WNRL) anticipates gross proceeds of around $167.4 million from the aforementioned offering, which are to be used to repay all borrowings under the company’s revolving credit facility, as well as fund a portion of its previously-announced acquisition of certain terminalling, storage and other logistics assets from St. Paul Park Refining. Jim Simons’ Renaissance Technologies owns 61,000 shares of Western Refining Logistics LP (NYSE:WNRL) as of June 30.

The next two pages of this article will discuss insider transactions involving four other companies as reported with the SEC on Friday.

One Executive at Well-Known Bar-Code Company Buys Shares

One member of Zebra Technologies Corp. (NASDAQ:ZBRA)’s executive team purchased a block of shares this past week. Jim L. Kaput, Senior Vice President, General Counsel and Secretary, purchased 3,457 class A shares on Thursday at $68.22 apiece. Following the recent purchase, Mr. Kaput currently holds an ownership stake of 53,663 class A shares.

The label printer and mobile technologies vendor has seen the value of its stock gain 20% in the past three months, but the stock is still 3% in the red year-to-date. Zebra Technologies Corp. (NASDAQ:ZBRA) reported net sales of $879 million for the three months ended July 2, down from $890 million posted for the same period of the prior fiscal year. The bar-code company’s second-quarter top line was impacted by political and economic uncertainty, which caused some project delays on the part of customers. The decline in sales was mainly driven by lower sales volume of barcode printers, wireless LAN and location solutions. John W. Rogers’ Ariel Investments upped its position in Zebra Technologies Corp. (NASDAQ:ZBRA) by 45% during the April-to-June quarter to 2.20 million shares.

SVP at Leading Petroleum Refiner Acquires Shares

One highly-informed executive at PBF Energy Inc. (NYSE:PBF) also acquired a block of shares last week. Thomas L. O’Connor, Senior Vice President of Commercial, snatched up 10,000 class A shares on Friday at prices varying from $21.71 to $21.74 per share, lifting his ownership to exactly 50,000 shares.

The independent petroleum refiner and supplier of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products has seen its market cap plunge by 38% since the start of the year. In early-September, PBF Energy Inc. (NYSE:PBF) completed the acquisition of a 50%-interest in Torrance Valley Pipeline Company LLC (TVPC) from one of its affiliates for around $175 million in cash. TVPC owns the 189-mile San Joaquin Valley Pipeline system, which has a throughput capacity of 110,000 barrels per day. The number of hedge funds followed by Insider Monkey with long positions in PBF Energy dropped to 24 from 35 during the second quarter. Seth Klarman’s Baupost Group recently reported upping its stake in PBF Energy Inc. (NYSE:PBF) to 15.72 million shares.

The final page of this article will focus on two other companies that registered some noteworthy insider trading last week.

Board Member of Struggling Apparel Maker Purchases Shares

A member of Genesco Inc. (NYSE:GCO)’s Board bought a relatively sizable block of shares this past week. David M. Tehle, member of the company’s Board of Directors since early February of 2016, acquired 4,100 shares on Friday at a price tag of $48.66 each. After the recent transaction, Mr. Tehle currently owns 6,006 shares.

Genesco Inc. (NYSE:GCO), whose business operations involve the sourcing, design, marketing, and distribution of footwear and accessories, has seen its market value plummet by 30% in the past month. The massive drop in market value was attributable to worse-than-anticipated fiscal second-quarter results, which reflected rapidly-shifting fashion footwear trends. As a result, the Nashville-based shoe and cap retailer cut its full-year earnings forecast to a range of $3.80-to-$4.00 per share, down from the previous guidance of $4.80-to-$4.90 per share. The company’s net sales for the second quarter ended July 30 decreased by 4.6% year-over-year to $626 million, reflecting the divestiture of the Lids Team Sports business. Royce & Associates, founded by Chuck Royce, was the owner of 848,439 shares of Genesco Inc. (NYSE:GCO) at the end of the second quarter.

Non-Executive Chairman at Large Health Insurance Firm Sells Shares

A highly-informed insider at UnitedHealth Group Inc. (NYSE:UNH) offloaded some shares last week. Non-Executive Chairman Richard T. Burke liquidated two blocks of 20,000 shares each on Wednesday, at prices that fell between $134.80 and $135.80 per share, trimming his direct ownership holding to 1.98 million shares. Mr. Burke also holds an indirect ownership stake of 86,000 shares, which are held in an irrevocable trust for the benefit of his children.

The shares of the diversified health and well-being company are up by 14% thus far in 2016 and have gained an impressive 183% over the past five years, so there is no surprise that certain long-serving employees are unloading some shares. It is argued that one of the primary reasons that health insurance firms such as UnitedHealth Group Inc. (NYSE:UNH) have been abandoning the public insurance exchanges of the Affordable Care Act is that a limited number of young, healthy individuals are signing up on these exchanges. Adage Capital Management, founded by Phillip Gross and Robert Atchinson, owns around 1.60 million shares of UnitedHealth Group Inc. (NYSE:UNH) as of June 30.

Disclosure: None