Insider buying usually implies corporate insiders are bullish on their company’s future prospects or shows insiders’ belief that the shares of their company are cheap. Furthermore, past research finds that insider purchases can earn an abnormal return both for corporate insiders and outsiders piggybacking insiders’ moves, so it does make sense to keep track of insider buying.
However, retail investors monitoring insider trading behavior should keep in mind that insiders are prohibited from “short-swing” transactions. This essentially means that insider trading metrics are suitable for longer-term-oriented investors only, as Board members and executives are implicitly forced to act as long-term value investors. But how can investors find information-rich insider buying activity? Literally anyone can get insider trading information for each U.S. publicly traded company on the SEC website, but it may be time consuming to search through thousands of filings out there. And here where our team comes in. Insider Monkey compiles lists of noteworthy insider trading on daily basis, so one can save a great deal of time by simply subscribing to our daily newsletters or looking for our insider trading articles on our website. That being said, let’s proceed to the discussion of some notable insider trading activity reported with the SEC on Friday.
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The Founder of Omni-Channel Retailer Purchases Shares After Plunge
One of the most important figures at Trans World Entertainment Corporation (NASDAQ:TWMC) purchased some shares last week. Robert J. Higgins, non-executive Chairman of the Board since January 2016, purchased a block of 18,001 shares on Thursday at $3.11 apiece and 13,999 shares on Friday for $3.10 each. The 32,000-share stake is held directly by the founder of the omni-channel retailer. Mr. Higgins also holds an indirect ownership stake of 14.28 million shares, held by the Robert J. Higgins TWMC Trust.
Trans World Entertainment Corporation (NASDAQ:TWMC) operates a chain of retail entertainment stores, mainly under the names f.y.e. (i.e. for your entertainment) and Suncoast Motion Pictures. The insider purchases mentioned above come shortly after the shares of the specialty retailer of entertainment products plunged following the release of disappointing sales figures in early January. The company’s sales from the f.y.e segment decreased by 10% year-over-year in the nine weeks that ended December 31, reflecting a comparable store sales decline of 7% and 3% fewer stores in operation. Meanwhile, the retailer’s total sales grew by 16% year-on-year due to the acquisition of an innovative and leading digital marketplace retail expert, called etailz. Trans World Entertainment’s shares are flat over the past year. Nantahala Capital Management, run by Wilmot B. Harkey and Daniel Mack, owned 1.78 million shares of Trans World Entertainment Corporation (NASDAQ:TWMC) at the end of the third quarter.
The next two pages of this article will focus on some fresh insider trading recorded at four other companies.