Insiders at Money-Losing Genetic Testing Company, Large U.S. Power Company, and Transforming REIT Are Buying Shares, Plus Some Noteworthy Insider Selling

Are a company’s corporate insiders buying or selling? That represents a relevant question for various types of investors in the stock market. One of the most important tools of fundamental security analysis revolves around knowing how insiders fell about their own company’s shares. After all, insider trading activity, both buying and selling, has been a fairly good predictor of future stock performance over the years.

As Board members and executives have access to information not generally available to the general public, it does make sense to keep track of what they do with their own shares. While not foolproof, numerous studies have concluded that insiders achieve fairly strong trading profits when buying shares their own company’s shares. One rule of thumb in financial markets says that insider buying is much more significant and informative than insider selling. Insiders sell shares for a variety of reasons such as estate planning, portfolio diversification, tax payments, to name just a few. Hence, sales should not be viewed as a sign of trouble unless multiple insiders are discarding large portions of their holdings at an alarming pace. On the other hand, insiders typically buy shares of their own company for one reason – the stock is cheap. With that in mind, let’s have a look at a set of noteworthy insider transactions reported with the SEC on Tuesday.

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Executive at Large U.S. Power Company Buys Shares

One member of Duke Energy Corp (NYSE:DUK)’s executive team added some shares to his holding last week. Franklin H. Yoho, Executive Vice President and President of the company’s natural gas business, bought 14,850 shares on Friday at a price tag of $74.00 each. Following the recent purchase, Mr. Yoho currently owns an aggregate of 23,687 shares.

Duke Energy Corp (NYSE:DUK), the largest power company by generation capacity in the United States, has seen the value of its shares increase by 3% since the start of the year. Earlier this month, the company said it anticipated to spend $200 million to repair the damage done to its operations by Hurricane Matthew, with the storm swamping the company’s 2016 storm-repair fund of $40 million. Duke Energy has been cutting its exposure to volatile power prices in wholesale markets and agreed to divest its International Energy business segment in October, excluding a 25% interest in a large regional producer of methyl tertiary butyl ether (MTBE) located in Saudi Arabia. The International Energy segment operates and manages power generation facilities and engages in sales and marketing of electric power, natural gas and natural gas liquids outside the U.S. (predominantly in Latin America). Jim Simons’ Renaissance Technologies LLC was the owner of 3.28 million shares of Duke Energy Corp (NYSE:DUK) at the end of the third quarter.

The next two pages of this article will discuss fresh insider buying and selling at other companies.

Non-Executive Chairman at Transforming REIT Purchases Shares

One important member of Gramercy Property Trust (NYSE:GPT)’s Board of Trustees purchased a rather sizeable block of shares earlier this week. Charles E. Black, the Non-Executive Chairman of Gramercy’s Board since June 2012, acquired 97,774 shares on Monday at prices varying from $8.47 to $8.52 per share. After the recent transaction, Mr. Black currently holds an ownership stake of 203,545 shares.

The shares of the global investor and asset manager of commercial real estate are 13% in the green this year. The real estate investment trust specializes in acquiring and managing single-tenant industrial, office, and specialty properties. Earlier this week, Gramercy Property Trust (NYSE:GPT) announced the closing of the sale of three single-tenant office buildings for gross proceeds of $106.3 million. With these sales, the REIT has sold more than $1.5 billion of single and multi-tenant assets in the Untied States and Europe this year, as part of its plan to dispose certain non-core assets after the merger with Chambers Street Properties in mid-December of 2015. In early November, the REIT’s Board approved a 13.6%-increase in the company’s quarterly dividend to $0.125 per share, with the increased dividend yielding 5.71% annually.

Cluster of Insider Buying at Money-Losing Genetic Testing Company

Let’s refocus our attention on the cluster of insider buying observed at InVitae Corp (NYSE:NVTA). To start with, Chairman and CEO Randal W. Scott snatched up 66,666 shares on Tuesday at a price of $6.00 per share. Dr. Scott currently owns an aggregate of 3.51 million shares following the recent purchase. Geoffrey S. Crouse, who has served on the company’s board since March 2012, purchased 15,000 shares on Friday at prices that fell between $6.23 and $6.30 per share, a purchase that lifted his holding to 34,259 shares. Long-time Board member Eric Aguiar bought a new stake of 10,000 shares on the same day at prices ranging from $6.25 to $6.30 per share.

The money-losing genetic testing company has seen the value of its stock drop by 15% since the beginning of the year. InVitae Corp (NYSE:NVTA) uses an integrated portfolio of laboratory processes, software tools and informatics capabilities to process DNA-containing samples, analyze information about patient-specific genetic variation and generate test reports for clinicians and their patients. The company’s plan or mission revolves around bringing comprehensive genetic information into mainstream medical practice. InVitae reported revenue of $15.81 million for the first three quarters of the year, up from $5.22 million recorded for the same period a year ago. Baker Bros. Advisors LP, managed by Julian and Felix Baker, reported ownership of 6.55 million shares of InVitae Corp (NYSE:NVTA) through the latest round of 13Fs.

The final page of this insider trading article will discuss fresh insider selling witnessed at two other companies.

Executive at Well-Known Drugstore Chain Discards Massive Block of Shares

A member of Walgreens Boots Alliance Inc. (NASDAQ:WBA)’s senior management team offloaded almost his entire holding at the end of the previous week. Ken Murthy, Executive Vice President of WBA and Chief Commercial Officer and President of Global Brands, discarded 102,172 shares on Friday at prices that fell in the range of $82.72 to $83.45 per share. After this sizeable sale, Mr. Murthy currently owns a mere 653 shares.

One should note, however, that the insider sale mentioned above comes a few weeks after the Chief Executive Officer of the drugstore chain, Stefano Pessina, snapped up 2 million shares at a price of $81.41 per share. The largest retail pharmacy, health and daily living destination across the United States and Europe has seen the value of its shares drop by 1% year-to-date. Walgreens Boots Alliance Inc. (NASDAQ:WBA)’s acquisition of the third-largest drugstore chain in the U.S., Rite Aid Corporation (NYSE:RAD), is expected to close in early 2017 amid delays in selling stores to receive regulatory approval. The $9.4 billion merger was originally expected to close in the second-half of this year. Michael Lowenstein’s Kensico Capital reported ownership of 3.40 million shares of Walgreens Boots Alliance Inc. (NASDAQ:WBA) in its 13F filing for the third quarter.

Former CEO of Provider of Housekeeping and Laundry Management Services Sells Shares

One of the most well-informed insiders at Healthcare Services Group Inc. (NASDAQ:HCSG) also offloaded a great deal of shares recently. Daniel P. McCartney, the Chairman of the Board and former CEO of Healthcare Services Group, liquidated 100,000 shares on Tuesday at $38.47 apiece. After the recent sale, Mr. McCartney currently owns a stake of 2.06 million shares.

The shares of the largest provider of housekeeping and laundry management services to the long-term care industry in the United States are 11% in the green year-to-date. The company renders such services to more than 3,500 facilities across 48 states. Healthcare Services Group Inc. (NASDAQ:HCSG) reported consolidated revenues of $392.73 million for the third quarter, an increase of 9.0% year-over-year. The increase mainly reflects revenue growth of 5.2% in the company’s housekeeping reportable segment due to service agreements entered into with new clients, as well as a spike of 15.7% in revenue from the company’s second reportable segment (i.e. dietary) that resulted from providing this service to a greater number of existing “Housekeeping” clients. Royce & Associates, founded by Chuck Royce, had around 325,000 shares of Healthcare Services Group Inc. (NASDAQ:HCSG) in its portfolio at the end of September.

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