Insiders at Automotive Replacement-Parts Distributor and Struggling Lighting Company Buy Shares After Earnings Disappointments, Plus Notable Insider Trading at Three Other Companies

The much-scrutinized earnings recession may finally come to an end. According to FactSet, the blended earnings decline for the companies comprising the S&P 500 currently stands at 0.3%, as compared to the 2% earnings decline anticipated by analysts at the end of the third quarter. The blended results combine actual results for the companies that have already released their earnings reports and the estimated results for the companies yet to release their reports.

Regardless of whether the earnings recession finally comes to a halt or not, there is a visible positive trend for the bottom-line figures released by U.S. publicly traded companies. However, should the S&P 500 Index record a decline in earnings this quarter, the so-called earnings recession will expand to six consecutive quarters of year-over-year declines in earnings. With U.S. companies gradually releasing their third-quarter earnings reports, one could anticipate insider trading activity to pick up soon. Although most companies’ blackout periods for insiders continue to restrict Board members and executives from buying and selling shares, there is some insider trading activity that may be worth the attention of the investment community. Hence, this article will lay off 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).

Chairman of Automotive Replacement-Parts Distributor Buys Shares After Earnings Disappointment

According to our insider trading database, Genuine Parts Company (NYSE:GPC) recently observed the first insider purchase of 2016. Thomas C. Gallagher, Chairman of the company’s Board of Directors who handed over the reins of the company earlier this year, purchased 3,000 shares on Thursday for $89.24 each. After the recent purchase, the former Chief Executive Officer of the distributor of automotive replacement parts currently holds an ownership stake of 564,498 shares. While some might have anticipated Mr. Gallagher to unload shares after stepping down from his role as CEO, he is actually boosting his stake – a positive sign for the investment community indeed.

The insider buying comes shortly after the automotive replacement-parts distributor released disappointing results for the third quarter, an earnings release that sent the shares down 7% in the past five trading sessions. Genuine Parts Company (NYSE:GPC) lowered its guidance for the year, with earnings per share being expected to fall in the range of $4.55-to-$4.60 versus the previous outlook of $4.70-to-$4.75. The company also said it anticipates an increase in sales of 0%-to-1%, down from the previous guidance of 1%-to-2%. Genuine Parts shares are 5% in the green this year. David Harding’s Winton Capital Management owned 292,394 shares of Genuine Parts Company (NYSE:GPC) at the end of the second quarter.

The next two pages of this insider trading article discuss more insider trading activity reported with the SEC on Friday.

Board Members and Executives at Low-Priced Cancer Diagnostics Company Participate in Public Offering

A high number of Board members and executives at Biocept Inc. (NASDAQ:BIOC) participated in the company’s recently-held public offering of 9.10 million shares and warrants to purchase up to 9.10 million shares at a combined offering price of $1.10 per unit (with each unit consisting of one share and one warrant). With that in mind, let’s see how many shares the company’s executive management team bought through the public offering.

To start with, President and CEO Michael W. Nall snapped up 36,363 shares and warrants to purchase the same amount of shares on Wednesday at $1.10 apiece. Following the transaction, Mr. Nall currently owns 49,574 shares of common stock via a trust fund. Timothy C. Kennedy, Chief Financial Officer and Senior Vice President of Operation, bought the same amount of 36,363 shares, lifting his overall holding to 61,363 shares. Veena M. Singh, a Senior Vice President and Senior Medical Director, purchased 10,000 units of common stock through the offering. Dr. Singh owns 26,666 shares after the recent purchase. Lyle J. Arnold, Chief Scientific Officer and Senior Vice President of Research and Development, snatched up 45,000 shares on Wednesday, a transaction that boosted his ownership stake to 65,238 shares.

The early stage cancer diagnostics company commercializing assays for lung, breast, gastric, colorectal and prostate cancers, and melanoma has seen the value of its shares plummet by 78% year-to-date. Biocept Inc. (NASDAQ:BIOC) plans to use the proceeds from the offering for general corporate purposes, as well as fund ongoing operations and expansion of its business.

Two Insiders at Struggling Lighting Company Purchase Shares

The man in charge of Cree Inc. (NASDAQ:CREE) and one Board member snapped up some shares this past week. President and CEO Charles M. Swoboda bought 10,000 shares on Thursday at a price tag of $22.22 each. Following the recent purchase, the CEO currently holds an aggregate of 545,870 shares. Director John B. Replogle acquired 5,000 shares on the same day for $22.34 apiece, lifting his overall ownership to 52,444 shares.

The insider buying comes after the shares of the maker lighting-class light emitting diode (LED) products, lighting products and wide bandgap semiconductor products for power and radio-frequency applications fell as much as 14% on Wednesday due to disappointing results for the first quarter of fiscal year 2016 that ended September 25. Cree Inc. (NASDAQ:CREE) recorded revenue from continuing operations of $321 million for the quarter, down from $381 million posted a year ago. In mid-July, the lighting company agreed to sell the Wolfspeed business, a division that makes chips for power-management and radio-frequency products. For the second quarter of fiscal 2017 ending December 25, Cree anticipates revenue from continuing operations in the range of $310 million-to-$330 million. Cree’s shares are down 17% year-to-date. Royce & Associates, founded by Chuck Royce, had 443,200 shares of Cree Inc. (NASDAQ:CREE) in its portfolio at the end of the June quarter.

The final page of this insider trading article discusses fresh insider selling observed at two other companies.

One Executive at Heico Corp Discards Shares

One member of Heico Corp (NYSE:HEI)’s executive team offloaded a sizeable block of shares this past week. Thomas S. Irwin, Senior Executive Vice President and Member of the Office of the Chief Executive Officer at Heico, discarded 13,900 units of common stock on Wednesday at $67.61 apiece. After the recent sale, Mr. Irwin currently owns 48,739 units of common stock, along with an additional 83,888 Class A shares. Heico has two classes of common stock, with the two classes being virtually the same, save for voting rights: Heico Class A common stock carries one-tenth of a vote and Heico common stock carries one vote.

Heico Corp (NYSE:HEI)’s business operations involve designing manufacturing and distributing niche aviation, defense, space, medial, telecommunication and electronics products. The company operates through two primary business segments: the flight support group (FSG) and the electronic technologies group (ETG). Heico’s net sales for the nine months that ended July 31 were a record $1.01 billion, up from $860.0 million posted for the same period of the previous year. The company’s stock has gained 22% since the start of the year. Ken Fisher’s Fisher Asset Management reported ownership of 1.02 million shares of Heico Corp (NYSE:HEI) as of the end of September.

Several Insiders at Well-Known Brokerage Firm Offload Shares

Several well-informed insiders at Charles Schwab Corp (NYSE:SCHW) offloaded shares this past week, most of whom, however, sold freshly-exercised stock options. As Insider Monkey leans towards discussing only the informative kind of insider trading activity, this section will discuss the insider selling that was not related to the exercise of stock options. Marie A. Chandoha, President and CEO of Charles Schwab Investment Management Inc., sold 14,000 shares on Thursday at prices varying from $32.17 to $32.46 per share. Following the recent sale, Ms. Chandoha currently owns 14,044 shares of Charles Schwab.

The first U.S. discount brokerage firm has seen its market capitalization jump by 8% in the past six months, which might have propelled Charles Schwab’s insiders to cash out portions of their holdings. In late September, analysts at Morgan Stanley initiated coverage on Charles Schwab Corp (NYSE:SCHW) with an ‘Overweight’ rating and a price target of $37, arguing that the company is best positioned to tackle three main challenges faced by the entire brokerage industry. The three challenges include changing demographics and customer behavior, growing regulatory burdens, as well as emerging technologies that could transform existing business models. John Armitage’s Egerton Capital Limited reported owing 9.77 million shares of Charles Schwab Corp (NYSE:SCHW) through the round of 13F filings for the second quarter.

Disclosure: None