Notable Insider Selling at Applied Materials Inc. (AMAT) and Costco Wholesale (COST), Plus Insider Moves at 3 Other Companies

Although plenty of research concludes that securities purchases on the part of insiders tend to beat broader market benchmarks by a significant margin, Insider Monkey does not recommend that investors blindly mimic each insider purchase. Instead, insider trading metrics should serve as additional tools in one’s security analysis process, helping them to build and support a larger investment thesis. The larger investment thesis could be based on expected bottom-line improvement, pressure from activist hedge fund managers or the possibility of a takeover, to name just a few.

At the same time, investors could use insider buying and selling activity, particularly clusters of buying or selling involving more than three insiders, as a stock selection procedure. Companies with strong insider buying or selling could represent possible ‘buy’ or ‘sell’ candidates that require further research. With that in mind, the following article will discuss a set of noteworthy insider transactions reported with the SEC on Tuesday.

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CEO of Struggling Galvanizing and Electrical Products Company Buys Shares

The man in charge of AZZ Inc. (NYSE:AZZ) purchased some shares at the beginning of the week. Thomas E. Ferguson, Chief Executive Officer and President of AZZ since November 2013, bought 7,500 shares on Monday at a price tag of $55.24 each. Following the recent purchase, Mr. Ferguson currently holds an ownership stake of 29,276 shares.

The aforementioned insider purchase comes shortly after the provider of galvanizing services, welding solutions, specialty electrical equipment, and services to the power generation, transmission, distribution, refining, and industrial markets released disappointing financial results for the three months ended August 31. AZZ Inc. (NYSE:AZZ)’s results for the second quarter of its fiscal year 2017 reflected the sustained impact of the depressed oil and gas, petrochemical, and solar markets. The company’s revenue for the three-month period was $195 million, down from $214.2 million recorded a year earlier. Meanwhile, net income fell by 41.9% year-over-year to $10 million. AZZ shares have plunged by 15% in the past month, bringing their year-to-date return down to a loss of 2%. Royce & Associates, founded by Chuck Royce, reported ownership of 69,652 shares of AZZ Inc. (NYSE:AZZ) in its 13F filing for the second quarter.

The next two pages of this insider trading article will discuss the insider trading activity observed at four other companies.

Insiders at Low-Priced Intellectual Property Company Buy Shares Via Public Offering

Two different insiders at Inventergy Global Inc. (NASDAQ:INVT) purchased shares of the company this week through a public offering of shares and warrants. To start with, Board member Francis P. Barton purchased a new stake of 17,600 shares on Tuesday at a price of $1.00 each. The purchase also entitled Mr. Barton to warrants to purchase another 17,600 shares of common stock. More importantly, Chairman and CEO Joseph W. Beyers acquired 20,000 shares, plus warrants to purchase an additional 20,000 shares. After the recent purchase, the CEO currently holds an ownership stake of 600,231 shares of common stock.

The shares of the Silicon Valley intellectual property company took a hit when Inventergy announced plans to offer 6 million shares at $1.00 apiece, along with warrants to purchase up to another 6 million shares. The net proceeds from the offering, totaling around $5.30 million, will bring Inventergy Global Inc. (NASDAQ:INVT)’s stockholders’ equity above the Nasdaq requirement of $2.5 million. In fact, this offering was part of the company’s plan of compliance agreed to with Nasdaq. The IP investment and licensing company that assists technology-leading corporations attain greater value from their IP assets has seen the value of its shares drop by 53% since the start of the year.

Top-Tier Executive at Oncology Drug Development Company Purchases Shares

Two of the most well-informed and influential executives at Champions Oncology Inc. (NASDAQ:CSBR) purchased shares over the past several trading sessions. President Ronnie Morris snatched up 9,537 shares on Monday at a price of $1.66 each, lifting his overall holding to 1.03 million shares. Moreover, Chief Executive Officer Joel Ackerman bought 5,000 shares on Friday at $1.64 apiece and 3,202 shares on Thursday at prices that fell between $1.61 and $1.62 per share. After the recent transactions, the CEO currently owns 1.03 million shares.

The oncology drug development company that develops advanced technology solutions and products used in the development and use of oncology drugs has seen the value of its stock plummet by 52% this year. Champions Oncology Inc. (NASDAQ:CSBR)’s TumorGraft Technology Platform offers a novel approach to simulating the results of human clinical trials used in developing oncology drugs. As a result, the company’s platform facilitates drug discovery with much lower costs and increased speed of development. The company’s revenue for the three months ended July 31 came in at $3.67 million, up from $2.82 million recorded a year a prior. Hal Mintz’s Sabby Capital was the owner of around 547,000 shares of Champions Oncology Inc. (NASDAQ:CSBR) at the end of the second quarter.

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

CEO of Strong Performing Chip-Gear Maker Offloads Sizeable Block of Shares

The higher Applied Materials Inc. (NASDAQ:AMAT)’s share price goes, the more insider selling emerges at the company. While this does not necessarily imply that the company is anticipated to experience serious troubles going forward, the increasing volume of insider selling may suggest an exit point for longer-term shareholders. The latest insider selling comes from President and CEO Gary E. Dickerson, who discarded 229,935 shares on Friday at prices varying from $29.70 to $29.74 per share. Following the sizeable insider sale, Mr. Dickerson currently holds an ownership stake of 1.56 million shares.

Although the volume of insider selling at the chip-gear maker keeps rising, analysts at Pacific Crest recently said that there is more upside for the company ahead. Pacific Crest analysts increased their price target on Applied Materials Inc. (NASDAQ:AMAT) to $35 from $33 in late-September and reiterated their ‘Overweight’ rating on the stock, saying that the chip-equipment firm could gain market share and expand its reach as its product pipeline continues to expand. “Applied Materials has a strong pipeline of new products, so we think there is meaningful opportunity for additional market expansion and share gains,” said Pacific Crest analysts in a note. The shares of Applied Materials are 53% in the green thus far in 2016. Drew Cupps’ Cupps Capital Management reported ownership of approximately 87,000 shares in Applied Materials Inc. (NASDAQ:AMAT) through the current round of 13F filings (for the September quarter).

Co-Founder of Well-Known Retailer Sells Shares

Last but not least, one member of Costco Wholesale Corporation (NASDAQ:COST)’s Board offloaded a voluminous block of shares last week. James D. Sinegal, a co-founder and former CEO of Costco for 23 years, liquidated 20,114 shares on Friday at prices that ranged from $148.83 and $149.34 per share. After the recent sale, Mr. Sinegal currently holds a direct ownership stake of 768,136 shares.

The world’s second-largest retailer, known for its membership-based business model, has been somewhat disturbed by the switch in its exclusive credit card brand. Costco Wholesale Corporation (NASDAQ:COST) accepted only American Express Company (NYSE:AXP) cards for years, but the top retailer ended its relationship with AmEx last year and inked new deals with Visa Inc. (NYSE:V) (which serves as its exclusive credit card brand) and Citigroup Inc. (NYSE:C) (which serves as its partner in issuing co-branded Costco Visa cards). The retailer recently said that around 85% of the accounts shifted from American Express to Visa were already activated. Costco shares are 6% in the red this year. Ken Fisher’s Fisher Asset Management owns 3,276 shares of Costco Wholesale Corporation (NASDAQ:COST) as of September 30.

Disclosure: None