Financial markets are bombarded with numerous pieces of information each day, and investors should learn how to filter out meaningful information and ignore the usual noise. In a similar fashion, Insider Monkey attempts to determine which insider trading contains viable and useful information, and which does not.
Insider trading watchers may have noticed that most insider selling activity is conducted under pre-arranged trading plans – the kind of insider selling Insider Monkey does not keep tabs on. And here is why… Corporate insiders usually sell shares for a wide range of reasons that may not be necessarily related to their company’s current developments or future prospects. Put it differently, insiders’ personal liquidity and diversification need surely affect the timing of their transactions, which makes it close to impossible to interpret any given transaction as informative or not. For that reason, Insider Monkey tries to scrape away the “routine” insider trading by ignoring insider transactions conducted under pre-arranged trading plans or transactions involving freshly-exercised stock options. This enables us to narrow down the list of information-rich insider trades that could contain predictive power. That said, the following article will discuss a set of noteworthy insider transactions reported with the SEC on Thursday.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.
CEO of Chinese Manufacturer of Electric Vehicles and EV Parts Keeps Buying Shares
The man in charge of Kandi Technologies Group Inc. (NASDAQ:KNDI) disclosed Thursday the purchase of a small block of shares. Chief Executive Officer and President Xiaoming Hu purchased 57,060 shares on Tuesday at a price tag of $5.15 each, all of which are held indirectly through Excel Vantage Group Ltd. Following the recent purchase, Mr. Hu currently holds an indirect ownership stake of 12.34 million shares through the entity mentioned above.
The producer and manufacturer of electrical vehicle products, electrical vehicle parts, and off-road vehicles in China has seen the value of its shares fall by 54% since the beginning of 2016. Kandi Technologies Group Inc. (NASDAQ:KNDI)’s third-quarter revenue dropped by 87.4% year-on-year to a mere $6.4 million due to a Chinese government decision to withhold subsidies pending an investigation on all EV manufacturers in China. The delay in subsidy payments caused weak EV parts demand from the JV Company, a 50/50 joint venture between Kandi and Geely Automobile Holdings Ltd. that manufactures electric vehicles. While a number of Chinese EV companies have been removed from the list of companies eligible for government subsidies, Kandi’s wholly-owned subsidiary Kandi Electric Vehicles recently received a subsidy payment of around $14.5 million to support research and development expenditures for a new model of electric vehicle. Ken Griffin’s Citadel Advisors LLC reported ownership of 48,980 shares of Kandi Technologies Group Inc. (NASDAQ:KNDI) through the latest round of 13Fs.
The next two pages of this article discuss fresh insider trading observed at four other companies.