Long-Serving Board Member at Top-Performing Chipmaker Sells Shares Ahead of Short-Seller Attack, Cluster of Buying at Spirits Company Priced Under $1, and Other Insider Trading

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.

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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.

Cluster of Insider Buying at Spirits Company That’s on Track to Become Profitable

Castle Brands Inc. (NYSEMKT:ROX) has been consistently featuring our insider trading articles throughout the course of 2016 and insiders keep buying shares. To start with, President and Chief Executive Officer Richard J. Lampen bought 50,000 shares on Tuesday and 40,000 shares on Wednesday at prices varying from $0.70 to $0.74 per share. Mr. Lampen currently owns an aggregate of 1.85 million shares after the recent purchases. Board member Mark Zeitchick snapped up 30,000 shares on Tuesday for $0.72 each, all of which are held by MZ Trading LLC – of which Mr. Zeitchick is the sole managing member. Mr. Zeitchick currently owns a total of 80,000 shares through the entity mentioned above. Board member Richard M. Krasno also purchased 30,000 shares on Tuesday at prices ranging from $0.72 to $0.73 per share, lifting his overall holding to 50,000 shares.

The shares of the developer and marketer of premium and super-premium branded spirits are 36% in the red thus far in 2016. Castle Brands Inc. (NYSEMKT:ROX)’s net sales for the six months ended September 30 were $36.6 million, up 3.8% year-over-year. The increase mainly reflects U.S. sales growth of Jefferson’s bourbons and Goslings Stormy Ginger Beer, partly offset by drops in vodka and rum sales. The company is on track to become profitable, as its net loss for the six months that ended September improved to $1.5 million from $2.1 million recorded a year ago. Mark Broach’s Manatuck Hill Partners added a 400,000-share stake in Castle Brands Inc. (NYSEMKT:ROX) to its portfolio during the third quarter.

Long-Serving Board Member at Top-Performing Chipmaker Sells Shares Ahead of Short-Seller Attack

One member of NVIDIA Corporation (NASDAQ:NVDA)’s Board of Directors offloaded a sizeable block of shares this week. Tench Coxe, who joined NVIDIA’s boardroom in 1993, sold 50,000 shares on Tuesday in multiple transactions ranging from $116.61 to $116.79 per share. The shares were held by a trust that currently owns an aggregate of 1.29 million shares. Mr. Coxe also holds a direct ownership stake of 6,213 shares.

Shares of NVIDIA Corporation (NASDAQ:NVDA) have soared by 238% so far in 2016, with the chipmaker representing the top-performing stock in the S&P 500 by a wide margin in 2016. This likely explains Mr. Coxe’s decision to offload some shares. Coincidentally, the insider sale discussed above comes shortly before renowned short-seller Andrew Left and his firm Citron Research tweeted a warning that NVIDIA’s stock would “head back to $90” in 2017. Citron Research sent a tweet with a text attachment that listed six weaknesses of the well-known digital-graphics specialist that shareholders are discounting. One of the weaknesses or risks was the argument that much of the company’s growth has been derived from gaming and at the expense of industry rival Advanced Micro Devices Inc. (NASDAQ:AMD), “as opposed to new total addressable markets.” Jim Simons’ Renaissance Technologies LLC had around 3.20 million shares of NVIDIA Corporation (NASDAQ:NVDA) in its equity portfolio at the end of September.

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

Executive at Growing Matrix Service Offloads Shares

One member of Matrix Service Co (NASDAQ:MTRX)’s executive team also unloaded a large block of shares this week. Bradley J. Rinehart, President of Matrix PDM Engineering, discarded 25,300 shares on Tuesday at a weighted average price of $22.59 per share. Following the recent sale, Mr. Rinehart currently owns an aggregate of 51,235 shares.

Matrix Service Co (NASDAQ:MTRX), which offers engineering, fabrication, construction, and repair and maintenance services to several markets including the oil and gas industries, has seen the value of its stock gain 11% so far in 2016. In mid-December, the company’s engineering division, Matrix PDM Engineering Inc. – of which Mr.  Rinehart is the President, acquired privately-held Houston Interests LLC, a global solutions company that provides consulting, engineering, design, construction services and systems integration. The number of hedge funds from our database with equity stakes in Matrix Service increased to 15 from 11 during the third quarter. Royce & Associates, founded by Chuck Royce, owned 2.25 million shares of Matrix Service Co (NASDAQ:MTRX) at the end of the September quarter.

Chairman of Provider of Engineering and Enterprise IT Services Sells Shares Near 52-Week High

The most influential member of Science Applications International Corp (NYSE:SAIC)’s boardroom sold some shares earlier this week. Edward Sanderson Jr., Chairman of the company’s Board, liquidated 3,600 shares on Thursday at prices ranging from $83.95 to $84.85 per share. Mr. Sanderson currently owns an aggregate of 17,080 shares following the recent sale.

The shares of the provider of technical, engineering and enterprise information technology services primarily to the U.S. government are trading near their 52-week high of $89.25, after having gained an impressive 86% year-to-date. This surge in the company’s share price does commend some diversification on the part of insiders, so the sale discussed above should not worry potential investors and shareholders. Just recently, Science Applications International Corp (NYSE:SAIC)’s Board approved a regular quarterly cash dividend of $0.31 per share, which equates to an annual dividend yield of 1.45%. Cliff Asness’ AQR Capital Management was the equity holder of around 226,000 shares of Science Applications International Corp (NYSE:SAIC) at the end of September.

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