Massive Cluster of Insider Selling at Top-Performing Chip-Gear Maker, Plus Other Noteworthy Insider Trading

It is often believed that insider selling represents a tip-off that corporate insiders anticipate their company’s shares to underperform. However, mild or even heavy insider selling does not necessarily mean that a stock is destined to collapse. At the end of the day, the well-known saying that insiders sell shares for wide array of reasons holds a grain of truth.

Corporate insiders, namely executives and Board members, usually sell shares for reasons ranging from expiring stock options to financial planning, with most insiders selling shares for personal financial reasons unrelated to much-feared bad times ahead for their companies. Insider Monkey tries to strip away the routine insider selling by ignoring insider transactions conducted under pre-arranged trading plans, usually associated with financial planning on the part of insiders, or transactions related to freshly-exercised stock options. The spur-of-the-moment insider selling analyzed by our team should not necessarily be interpreted as conveying bearish information either, as insiders can still sell shares spontaneously for personal needs without taking into consideration firm-specific developments and prospects. Bearing that in mind, the following article will mostly discuss fresh insider selling reported with the SEC on Wednesday.

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Board Member at Expanding Bank Buys Shares After Merger Announcement

Before we proceed to discussing insider selling, let’s have a quick look at some insider buying observed at Southern National Banc. of Virginia Inc. (NASDAQ:SONA). Board member Charles A. Kabbash snatched up a stake of 11,000 shares on Wednesday at a price tag of $9.09 per share, a stake held in the Charles A. Kabbash Revocable Trust. Mr. Kabbash also owns 26,073 shares jointly with his spouse, as well as an additional 42,585 shares held directly.

In mid-December, the holding company for chartered bank Sonabank announced plans to merge with Eastern Virginia Bankshares Inc. (NASDAQ:EVBS), the holding company of EVB. The soon-to-be merged company will have roughly $2.4 billion in total assets, $2.0 billion in total deposits, and $1.8 billion in total loans. The combined company, which will assume the Southern National Bancorp of Virginia Inc. name for the holding company and the Sonabank name for banking operations, will have 47 branch locations across both Maryland and Virginia, including the Washington, D.C. and Richmond, Virginia MSAs. The merger is anticipated to close during the second quarter of this year. Neil Chriss’ Hutchin Hill Capital had 240,000 shares of Southern National Banc. of Virginia Inc. (NASDAQ:SONA) in its portfolio at the end of the third quarter.

Let’s head to the next two pages of this insider trading article, where we discuss fresh noteworthy insider selling witnessed at four companies.

CEO of Hybrid Tobacco and Real Estate Company Sells Massive Block of Shares

The man in charge of Vector Group Ltd (NYSE:VGR) discarded a great deal of shares at the beginning of 2017. Chief Executive Officer and President Howard M. Lorber offloaded 300,000 shares on Wednesday at a price of $22.85 per share. Following the sizeable sale, Mr. Lorber currently owns an aggregate of 436,665 shares.

Vector Group Ltd (NYSE:VGR) operates as a holding company focused on manufacturing and selling cigarettes through the Liggett Group and Vector Tobacco subsidiaries; selling electronic cigarettes; and investing real estate properties or projects through its real estate business. Liggett represents the fourth-largest manufacturer of cigarettes in the United States based on unit sales. The hybrid tobacco and real estate company pays out a quarterly cash dividend of $0.40 per share, which equates to an annual yield of 7.05%. However, some fear the company’s hefty dividend payments are not sustainable, as the company pays out as dividends a lot more than it earns. Similarly, Vector Group’s dividend appears to be unsustainable on a free cash flow basis as well, as the dividend payments for the past 12 months exceeded the free cash flow generated over the same period. The shares of Vector Group are 3% in the green for the past year. Jim Simons’ Renaissance Technologies LLC was the equity holder of 6.47 million shares of Vector Group Ltd (NYSE:VGR) at the end of September.

Retiring CEO of Retail REIT Sell Voluminous Block of Shares

National Retail Properties Inc. (NYSE:NNN)’s most well-informed and influential executive also unloaded a massive amount of shares this week. CEO and Chairman Craig Macnab, who recently announced plans to retire as CEO and step down as Chairman and a member of the Board of Directors effective April 28 this year, sold 85,000 shares on Tuesday at $43.99 apiece. Mr. Macnab currently holds an ownership stake of 425,000 shares after the recent sale.

The real estate investment trust (REIT) that acquires, owns and invests in properties leased mainly to retail tenants such as Target and Wal-Mart under long-term net leases has seen the value of its shares increase by 12% in the past year. In mid-October, National Retail Properties Inc. (NYSE:NNN)’s boardroom approved a quarterly dividend of $0.455 per share, which yields 4.01% annually. The dividend yield is quite high for this REIT, often seen as one of the safest and most durable REITs in the world. More importantly, the REIT paid out an annual dividend of $1.78 per share for 2016, with the 4% year-over-year increase representing the 27^th consecutive annual dividend increase for the company. A total number 20 hedge funds from our system had equity stakes in the REIT at the end of the third quarter, up from 19 registered at the end of the second quarter. Ken Fisher’s Fisher Asset Management reported owning roughly 866,000 shares of National Retail Properties Inc. (NYSE:NNN) in the round of 13Fs for the September quarter.

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

Massive Cluster of Insider Selling at Top-Performing Chip-Gear Maker

Let’s have a brief look at a cluster of insider selling at Applied Materials Inc. (NASDAQ:AMAT), where four different insiders offloaded shares over the past week or so. To start with, Thomas F. Larkins, Senior Vice President, General Counsel and Corporate Secretary, sold 75,000 shares on Tuesday and 25,000 shares on Wednesday at prices varying from $31.66 to $32.29 per share. Mr. Larkins currently owns an aggregate of 457,782 shares following the recent sale. Board member Dennis D. Powell offloaded 21,017 shares on Tuesday at a weighted average price of $31.95 per share, cutting his overall holding to 77,190 shares. Omkaram Nalamasu, Senior Vice President and Chief Technology Officer, offloaded 16,841 shares on Friday at prices that fell between $32.35 and $32.37 per share, a sale that trimmed Dr. Nalamasu’s ownership to 326,611 shares. Last but not least, Board member Stephen R. Forrest discarded 4,800 shares last Thursday at $31.86 apiece, after which he currently owns 84,159 shares.

The shares of semiconductor equipment maker Applied Materials Inc. (NASDAQ:AMAT) are trading slightly below their 52-week high of $33.68, which possibly explains the spike in insider selling at the company. After all, Applied Materials was one of the five top-performing stocks in the S&P 500 last year and has gained an impressive 81% in the past 12 months. Just recently, analysts at Goldman Sachs downgraded the chip-gear marker to ‘Neutral’ from ‘Buy’, citing stock price outperformance. “While we remain very bullish on management’s ability to identify technology inflections, appropriately allocate resources and to ultimately gain share and deliver above-industry-average growth, we view risk-return to be fair at current levels post the +74% stock price move in calendar 2016,” said Goldman Sachs analysts in a recent note. Ken Griffin’s Citadel Advisors LLC was the equity holder of 7.07 million shares of Applied Materials Inc. (NASDAQ:AMAT) at the end of September.

Executive at Leading Operator of Entertainment and Dining Venues Unloads Shares

There was some noteworthy insider selling at Dave & Buster’s Entertainment Inc. (NASDAQ:PLAY) this week as well. Jay L. Tobin, Senior Vice President, General Counsel and Secretary, liquidated 20,000 shares on Tuesday at prices ranging from $55.24 to $56.02 per share, as well as offered 1,000 shares as a bona-fide gift. Following these transactions, Mr. Tobin currently owns a stake of 81,071 shares.

The operator of high-volume entertainment and dinning venues in North America for adults and families under the name “Dave & Buster’s” has seen the value of its shares advance by 47% in the past three months. The strong stock performance has been driven by outstanding business performance, as Dave & Buster’s Entertainment Inc. (NASDAQ:PLAY) saw its third-quarter revenue jump by 18.6% year-on-year to $228.7 million. Meanwhile, the company’s comparable store revenue rose by 5.9% year-over-year in the third quarter, somewhat lower than the gain of 8.8% in the third quarter of 2015. Steve Cohen’s Point72 Asset Management owned 1.18 million shares of Dave & Buster’s Entertainment Inc. (NASDAQ:PLAY) on September 30.

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