Legendary Railroad Executive Offloads Huge Amount of Shares After Announcing Decision to Retire from Canadian Pacific Railway, Plus Other Insider Trading

Assuming corporate insiders know a lot more about their company’s prospects and recent developments than any of us, which they do, investors would be wise to keep a close eye on what insiders are doing with company shares. To a large extent, Board members and executives have up-to-date information about each aspect of their company’s business, including product launches, marketing campaigns, among others.

These highly-informed individuals are way ahead of analysts and portfolio managers, which possibly explains why their purchases tend to outperform broader market benchmarks on aggregate. However, retail investors should not blindly mimic each insider move and expect enormous trading profits. Instead, outsiders need to consider the underlying factors that dictate the timing of insiders’ transactions. Most insiders are selling shares for diversification or liquidity needs – the kind of insider selling investors should try to overlook. All in all, investors can get a better sense of a stock’s prospects by watching the trading activity of corporate insiders. Insider Monkey processed the majority of Form 4 filings submitted with the SEC on Monday and pinpointed the most noteworthy insider transactions, which are discussed later on in the article.

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Board Members of Commercial-Stage Biotechnology Company Purchase Shares Through Offering

Two members of Heron Therapeutics Inc. (NASDAQ:HRTX)’s Board of Directors purchased a great deal of shares last week. To start with, Kevin C. Tang, who has served as director of Heron since February 2009 and as Chairman since July 2012, purchased 2.46 million shares on Thursday at a price tag of $12.20 each, all of which are held by Tang Capital Partners LP and Tang (APPA) Holdings LLC. Mr. Tang holds an indirect ownership of 8.33 million shares following the recent purchase, as well as a direct ownership stake of 6,941 shares. John W. Poyhonen, director of Heron since January 2014, acquired a new stake of 10,000 shares on the same day for $12.20 each.

The two Board members acquired the shares through a public offering, expected to raise around $150 million. The commercial-stage biotechnology company plans to use the capital from the offering to fund the continued commercialization and marketing of SUSTOL, the commercial launch of CINVANTI, if approved by the U.S. FDA, fund the ongoing and future clinical trials, as well as repay a portion of its outstanding debt. SUSTOL, Heron Therapeutics Inc. (NASDAQ:HRTX)’s first commercial product, was approved by the FDA in early August 2016. SUSTOL is the first approved 5-HT3 receptor antagonist with an extended-release effect and five-days of Chemotherapy Induced Vomiting (CINV) prevention for moderately emetogenic chemotherapy and most highly emetogenic chemotherapy regimens. Heron’s shares have plunged by 46% in the past year. Kevin Kotler’s Broadfin Capital held 2.85 million shares of Heron Therapeutics Inc. (NASDAQ:HRTX) at the end of September.

Let’s head to the next pages of the article, where more insider buying and selling recently observed at four companies is discussed.

Member of Transcat’s Boardroom Buys 1,000 Shares

A member of Transcat Inc. (NASDAQ:TRNS)’s boardroom also snapped up a few shares last week. Director Angela J. Panzarella purchased 1,000 shares on Thursday at a weighted average price of $10.68 per share, a purchase that lifted her overall holding to 11,000 shares. Although the small purchase does not inspire too much optimism, most insider purchases, regardless of their size, represent a positive indicator.

The provider of accredited calibration and laboratory instrument services and a value-added distributor of professional grade test, measurement and control instrumentation has seen the value of its shares advance by 17% in the past 12 months. Transcat Inc. (NASDAQ:TRNS) reported record quarterly revenue of $34.5 million for the quarter that ended September 24, up from $29.5 million posted for the same period of the previous year. Charles Frumberg’s Emancipation Capital owned 1.02 million shares of Transcat Inc. (NASDAQ:TRNS) on September 30.

Legendary Railroad Executive Offloads Huge Amount of Shares After Decision to Retire from CP

Let’s refocus our attention on some noteworthy insider selling reported on Monday, starting with the insider selling at Canadian Pacific Railway Limited (USA) (NYSE:CP). CEO E. Hunter Harrison, who announced several days ago that he will depart from the Canada’s second-largest railroad operator, sold out a 153,951-share stake held by the E. Hunter Harrison Revocable Trust on Friday for $150.81 each, as well as sold a stake of 24,666 shares held by the Jeannie D. Harrison Revocable Trust at $150.82 apiece.

The media speculates that the legendary executive who has revived three troubled railroads was teaming with activist investor Paul Hilal to get the top job at the nation’s largest east cost railroad, CSX Corporation (NASDAQ:CSX). Canadian Pacific Railway Limited (USA) (NYSE:CP) recently reported a 20.4%-increase in quarterly profit, as well as announced that Keith Creel will become the company’s CEO and President effective January 31. The shares of the railway company are up 33% in the past one year. Charles Paquelet’s Skylands Capital added a 10,700-share stake in Canadian Pacific Railway Limited (USA) (NYSE:CP) to its portfolio during the fourth quarter.

The final page of the article will discuss more insider selling reported with the SEC on Monday.

Executive at Open-Source Software Firm Sells Shares

One member of Red Hat Inc. (NYSE:RHT)’s management team unloaded some shares last week as well. DeLisa K. Alexander, Chief People Officer and Executive Vice President, sold 16,712 shares on Friday at prices varying from $73.62 to $73.75 per share. Ms. Alexander offloaded an additional 2,150 shares last week, of which 785 shares were withheld to satisfy tax obligations. The Chief People Officer currently owns an aggregate of 37,373 after the recent sale.

The shares of the open-source software firm are up 3% in the past year despite suffering a major pullback in mid-December, when the company released lower than expected third-quarter results and announced the departure of CFO Frank Calderoni. Although CFO departures raise red flags on most occasions, Red Hat Inc. (NYSE:RHT)’s CFO left the company to take the CEO role of business software company Anaplan. The company revenue for the three months that ended November 30 grew by 17.5% year-on-year to 615.3 million. Ken Griffin’s Citadel Advisors LLC had 3.05 million shares of Red Hat Inc. (NYSE:RHT) in its equity portfolio at the end of the third quarter.

Director at Cybersecurity and Data Storage Company Offloads Shares

The insider selling activity at Barracuda Networks Inc. (NYSE:CUDA) has been intensifying as of late, with some sales conducted under pre-arranged trading plans. So let’s have a quick look at the spur-of-the-moment insider selling only. Lead independent director Jeffrey R. Allen, who has served on the company’s boardroom since June 2007, liquidated 15,000 shares on Friday at prices that fell between $22.99 and $23.13 per share, all of which were held directly by the Jeffry & Terry Allen Revocable Trust. After the recent sale, Mr. Allen currently owns a total of 138,365 shares through the aforementioned trust.

Barracuda Networks Inc. (NYSE:CUDA), which designs and delivers easy-to-use security and data protection solutions, has seen its market capitalization spike by 116% over the past 12 months. The insider selling comes shortly after the cybersecurity and data storage company released strong third-quarter financial results. Following the earnings release, analysts at Baird raised their price target on Barracuda Networks to $31 from $29, saying that the company was” transitioning its model to a cloud-based model faster than most across the IT landscape” and that its penetration of the Fortune 1000 rose by 10 customers sequentially to more than 50. This reflects “the up-market opportunity facilitated by the public cloud.” Jim Simons’ Renaissance Technologies LLC reported owning 551,200 shares of Barracuda Networks Inc. (NYSE:CUDA) in its 13F filing for the third quarter.

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