Insiders at Harley-Davidson Inc. (HOG) and Asset Manager Invesco Ltd. (IVZ) Offload Shares, Plus Other Insider Trading

Insider trading – legal buys and sales completed by corporate insiders – represents an important aspect investors should consider when analyzing securities. Although it is generally known that corporate insiders buy shares of their companies for one simple reason – they believe Mr. Market undervalues those shares, insider trading watchers should still be very cautious when deciding on whether an insider purchase is informative or not.

It is true that insider purchases tend to beat broader market benchmarks on aggregate, but the key word here is “aggregate.” Hence, I would like to lay out three important tips that can enable investors to identify informative insider purchases. First, investors should look for clusters of insider buying, which usually imply that there is a consensus among insiders that their companies’ shares are undervalued. Second, investors should avoid insider transactions conducted under pre-arranged trading plans, as recent research shows that spur-of-the-moment insider purchases generate higher returns than those conducted under trading plans. Third, investors should attempt to find purchases conducted by long-time insiders who purchase shares for the first time. There must be a strong reason why those insiders decide to initiate stakes after serving for their companies after a few years. With that in mind, let’s have a look at a set of noteworthy insider purchases and sales reported with the SEC on Thursday.

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Insider at Transforming REIT Buys Shares after Spin-off Announcement

One member of Vornado Realty Trust (NYSE:VNO)’s Board of Trustees acquired a relatively sizeable block of shares this week. Director Daniel R. Tisch acquired a new stake of 50,000 shares on Wednesday at prices ranging from $87.96 to $88.92 per share, a stake held by the Damial Foundation Inc. – a charitable foundation over which Mr. Tisch holds sole voting and investment power. Mr. Tisch also holds a direct ownership stake of 5,000 shares.

In late October, landlord Vornado Realty Trust (NYSE:VNO)’s Board of Trustees approved the tax-free spin-off of its portfolio of Washington, D.C. office buildings and apartments into a new company that would be merged with the business and certain select assets of real estate company, called the JBG Companies. The deal is set to create a landlord with a significant presence in the Washington area, aggregating around 11.8 million square feet of office space and more than 4,400 apartments. According to the man in charge of Vornado Realty Trust, the planned spin-off of the company’s D.C. portfolio represents a “no-brainer” that will allow his real estate investment trust to retain an interest in D.C.’s office market without committing a great deal of attention on this market. The shares of the REIT are 13% in the red year-to-date. LMR Partners, founded by Ben Levine, Andrew Manuel and Stefan Renold, added a 14,324-share stake in Vornado Realty Trust (NYSE:VNO) to its portfolio during the third quarter.

The final page of this article discusses more insider transactions reported with the SEC on Thursday.

Board Member at Struggling Power Generator Piles Up Shares

Let’s refocus our attention on the insider buying that occurred at Calpine Corporation (NYSE:CPN). Board member W. Benjamin Moreland bought 50,000 shares on Wednesday at prices varying from $11.06 to $11.10 per share. Mr. Moreland, who became a director in late January 2008, currently owns an aggregate of 101,273 shares.

The insider buying comes shortly after the owner and operator of natural gas-fired and geothermal power plants in North America released its financial results for the third quarter. Calpine Corporation (NYSE:CPN), one of the largest power generators in the U.S. measured by power produced, reported operating revenues of $2.36 billion, up from $1.95 billion posted a year ago. The company reported net income of $295 million for the quarter, more than the $273 million-figure recorded a year ago. Nonetheless, Calpine reduced its adjusted EBITDA guidance for 2016, reflecting lower energy margins due to decreased contribution from hedges. The shares of the U.S. power generator are 23% in the red this year. Adam Usdan’s Trellus Management Company bought a new stake of 15,000 shares in Calpine Corporation (NYSE:CPN) during the September quarter.

Insider Buying at Creator of Online Learnings Tools After Earnings Disappointment

Two executives at Instructure Inc. (NYSE:INST) boosted their ownership stakes earlier this week. To start with, Chief Executive Officer Joshua L. Coates snatched up 10,000 shares on Thursday at a weighted average cost of $19.76 per share. The shares are held by the Joshua L. and CeliAnne C. Coates Trust, which holds an aggregate of 115,250 shares. Mr. Coates holds an additional indirect ownership stake of 2.66 million shares, held by Grizzly Peak LLC (of which Mr. Coates is the manager). An additional 43,750 shares are owned via the Coates Equity Trust. Matthew A. Kaminer, Senior Vice President, General Counsel and Secretary, bought 650 shares on Thursday at a price target of $19.71 each, a purchase that lifted his direct ownership stake to 15,267 shares. Mr. Kaminer also reported the purchase of an additional 951 shares, of which 751 shares are held by his spouse and 200 shares are owned by his sons.

The insider buying comes a few days after the provider of a cloud-based learning management platform for academic institutions and companies released a seemingly strong earnings report, which spooked investors though. The small creator of online learning tools has lost a disturbing 21% in the past five trading sessions. Instructure Inc. (NYSE:INST) reported revenue of $30.15 million for the quarter, up from $20.89 million posted a year ago. However, the company’s net loss widened to $12.32 million from $10.21 million. Another reason why investors reacted negatively to the company’s earnings release was the updated guidance for full-year 2016 results. Instructure lowered its full-year revenue guidance to the range of $109.7 million-to-$110.3 million from the previous guidance of $110.8 million-to-$112.0 million. Richard Driehaus’ Driehaus Capital Management LLC was the owner of 286,788 shares of Instructure Inc. (NYSE:INST) at the end of June.

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

Board Member of Well-Known Motorcycle Maker Sells Shares

One member of Harley-Davidson Inc. (NYSE:HOG)’s Board of Directors unloaded a really sizeable block of shares this week. Board member Donald A. James discarded 100,000 shares on Wednesday at a weighted average price of $56.13 per share. The shares were held through Fred Deeley Limited, which owns an aggregate of 311,788 shares of Harley-Davidson following the recent sale. Mr. James also holds a direct ownership stake of 5,522 shares.

The aforementioned insider sale comes after the well-known motorcycle maker released its financial results for the third quarter. Harley-Davidson Inc. (NYSE:HOG) reported revenue from motorcycles and related products of $1.09 billion for the quarter, down from $1.14 billion reported for the same period of the prior year. The company plans to ship between 44,200 bikes and 49,200 bikes during the current quarter, as compared to 48,149 bikes delivered during the fourth quarter of the previous year. For the full year, the company anticipates to ship between 264,000 and 268,000 bikes, flat at the midpoint relative to the prior-year figure. The shares of Harley-Davidson are up 24% this year. Ken Fisher’s Fisher Asset Management trimmed its position in Harley-Davidson Inc. (NYSE:HOG) by 5% during the third quarter to 108,314 shares.

Executive at Successful Asset Manager Offloads Shares

A member of Invesco Ltd. (NYSE:IVZ)’s executive team offloaded a large amount of shares this week as well. Andrew Tak Shing Lo, a senior managing director at the investment management firm, liquidated 150,000 shares on Wednesday at prices varying from $27.60 to $27.85 per share. Following the recent share, the senior managing director currently holds an aggregate of 251,603 shares.

Although the Wall Street Journal calls Invesco Ltd. (NYSE:IVZ) “a rare bright spot in the grim world of asset managers that are losing out to a handful of giant index-fund providers”, the company’s share price has dropped by 16% year-to-date. While most active managers appear to have been losing the battle against low-cost exchange-traded funds and other passive vehicles, Invesco enjoyed strong inflows during the third quarter. The asset manager reported net long-term inflows of $12.2 billion in the third quarter, reflecting net inflows of $8.3 billion into its actively managed funds and $3.9 billion into its passive products.  Alan Reid’s Forward Management has 20,115 shares of Invesco Ltd. (NYSE:IVZ) in its portfolio as of the end of September.

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