Microsoft Corporation (MSFT) and Antero Resources Corp (AR) Register Sizeable Insider Sales; Plus Insider Buying at Three Other Companies

A longstanding rule of thumb says that corporate insiders buy shares of their own companies on the open market for one simple reason – they believe Mr. Market severely undervalues their companies’ stock. Although it is true that insider purchases tend to beat broader market benchmarks on aggregate, Insider Monkey does not recommend investors to blindly mimic each insider purchase. However, I would like to point out three simple tips that will likely allow investors to identify information-rich insider buying activity.

The most important tip would be to look for clusters of insider buying, which usually suggest that there is a consensus among insiders that their companies’ shares are undervalued. Another highly important tip would be to ignore insider transactions conducted under pre-arranged trading plans, as past research concludes that spur-of-the-moment insider purchases tend to generate higher returns than those conducted under trading plans. Last but certainly not least, insider trading watchers need to look for insider trading conducted by long-time insiders purchasing shares for the first time; there definitely must be a strong reason why insiders decide to acquire a new stake after serving at their companies for years. That said, the following article will discuss fresh insider buying witnessed at three companies, as well as some noteworthy insider selling registered at two other companies.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

Producer of Ready-Mixed Concrete Sees Insider Buy Shares After Two Years of Muted Insider Buying Activity

According to the insider trading database run by Insider Monkey, US Concrete Inc. (NASDAQ:USCR) had not witnessed any insiders purchase shares since early 2014 until this week. Niel L. Poulsen, Executive Vice President of Southeast Division at US Concrete, snapped up 18,000 shares on Monday for $56.00 each. After the Monday purchase, Mr. Poulsen currently holds a stake of 41,481 shares.

The insider buying comes shortly after the producer of ready-mixed concrete released a weaker-than-anticipated second-quarter earnings report. Several rock and sand construction aggregates companies also recently reported weak earnings reports, raising questions about the construction activity in the United States. US Concrete Inc. (NASDAQ:USCR)’s consolidated revenue grew by 12.7% year-on-year to $275.8 million, but missed analysts’ estimates of $294.7 million. In June, the company acquired ready-mixed concrete producer NYCON Supply Corp., which serves high- and mid-rise projects in New York City through two concrete batch plants and a fleet of 38 trucks. US Concrete shares are 5% in the green year-to-date. Royce & Associates, founded by Chuck Royce, cut its stake in US Concrete Inc. (NASDAQ:USCR) by 84% during the June quarter to approximately 38,000 shares.

The second page of this article will display two companies with fresh insider buying, while the third page will discuss noteworthy insider selling at two other companies.

In-flight Broadband Firm Registers Massive Cluster of Insider Buying

Gogo Inc. (NASDAQ:GOGO) witnessed a cluster of insider buying earlier this week, the kind of insider buying the investment community should pay close attention to. To begin with, board member Charles C. Townsend bought 200,000 shares on Monday at prices varying from $10.20 to $11.00 per share, all of which are held by the Charles C. Townsend III Trust that currently owns 301,400 Gogo shares. Ash ElDifrawi, Chief Commercial Officer and Executive Vice President, purchased a 50,000-share block on the same day at prices that fell between $10.48 and $10.97 per share, boosting his overall ownership to 78,087 shares. Last but not least, President and CEO Michael Small snatched up 50,000 shares at prices ranging from $10.20 to $10.50 per share, which lifted his holding to 244,832 shares.

The provider of in-flight connectivity and wireless in-cabin digital entertainment solutions has seen 37% of its market value being lost since the beginning of the year. Gogo Inc. (NASDAQ:GOGO)’s stock has lost a great deal of value after rival company ViaSat Inc. (NASDAQ:VSAT) won a major contract with American Airlines Group Inc. (NASDAQ:AAL). ViaSat was selected as the in-flight Wi-Fi provider for American’s new 737 Max fleet. Andy Redleaf’s Whitebox Advisors trimmed its stake in Gogo Inc. (NASDAQ:GOGO) by 66% during the second quarter to 28,146 shares.

The CEO of This Consumer Goods Company Buys Some Shares Despite Stepping Down

The man in charge of Hanesbrands Inc. (NYSE:HBI) also snapped up some shares earlier this week. CEO and Chairman Richard A. Noll, who will step down from his role as CEO on October 1 and will continue to serve as Executive Chairman, acquired 20,000 shares on Tuesday at prices that ranged from $25.71 to $25.75 per share. After the recent purchase, Mr. Noll currently holds an ownership stake of 870,077 shares.

The consumer goods company with a portfolio of leading apparel brands such as Hanes, Champion and others has seen the value of its stock drop by 9% since the start of the year, reflecting a sales slowdown in recent quarters due to struggles in the entire retail industry. In mid-July, the North Carolina-based retailer acquired Pacific Brands Limited in an all-cash transaction valued at $800 million. The freshly-acquired company is an underwear and intimate apparel company in Australia. Hanesbrands lost some appeal among the hedge funds followed by Insider Monkey during the first quarter, as the number of funds invested in the company fell to 34 from 42 quarter-over-quarter. Ric Dillon’s Diamond Hill Capital acquired a new stake of 6.25 million shares of Hanesbrands Inc. (NYSE:HBI) during the second quarter.

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

Independent Oil and Natural Gas Company Registers Massive Insider Sale

Antero Resources Corp (NYSE:AR) has registered striking insider selling activity in the past several trading sessions. Glen C. Warren Jr., President, Chief Financial Officer and Secretary, discarded 800,000 shares on Friday and 200,000 shares on Monday at prices ranging from $27.06 to $28.21 per share, cutting his overall holding to 10.67 million shares.

The shares of the independent oil and natural gas company engaged in the exploration, development and acquisition of natural gas, NGLs and oil properties located in the Appalachian Basin has seen its market cap spike by 26% since the start of the year. The company’s drilling opportunities are focused in the Marcellus Shale and Utica Shale of the Appalachian Basin. In early June, Antero Resources Corp (NYSE:AR) agreed to purchase approximately 55,000 net acres on the core of the Marcellus Shale for $450 million, a transaction set to close during the current quarter. William Michaelcheck’s Mariner Investment Group owns 83,400 shares of Antero Resources Corp (NYSE:AR) as of June 30.

Microsoft’s CFO Jettisons Sizable Block of Shares

Microsoft Corporation (NASDAQ:MSFT) also recorded a massive insider sale earlier this week. Chief Financial Officer Amy Hood offloaded 120,000 shares on Monday at prices varying from $57.82 to $57.91 per share. After the recent sizable sale, Ms. Hood currently owns 523,425 shares of Microsoft.

LinkedIn Corp (NYSE:LNKD), which recently agreed to be bought by Microsoft for $26.2 billion, released a much stronger-than-anticipated second-quarter earnings report. The social networking and enterprise software vendor reported earnings per share of $1.13 on revenue of $932.7 million, easily beating analysts’ expectations of $898.67 million and $1.13. The second-quarter earnings report was released shortly before LinkedIn shareholders are set to vote on selling out to Microsoft, so could shareholders oppose the merger? Analysts believe the $196.00 per share offer would not be reached by LinkedIn until at least 2020 should shareholders veto the merger so, the multi-billion-dollar deal will most likely get approved without strong resistance. Microsoft shares are up by 4% since the start of the year. Donald Yacktman’s Yacktman Asset Management reported owning 12.52 million shares of Microsoft Corporation (NASDAQ:MSFT) in its 13F for the second quarter.

Disclosure: None