Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Should Investors Be Worried About Insider Sales At RadNet Inc. (RDNT) And Tucows Inc. (USA) (TCX)?

Numerous studies have shown how portfolio management based on signals from insider trading can outperform the market. Given that a company’s management is in the best position to judge its future prospects, the results are not surprising at all. In order to help everyday investors make the right decisions, we at Insider Monkey keep a close eye on such transactions. In this regard, two companies experienced significant insider sales yesterday: RadNet Inc. (NASDAQ:RDNT) and Tucows Inc. (USA) (NASDAQ:TCX). It should however be borne in mind that insider sales do not necessarily generate a bearish signal as they can occur due to a large variety of reasons, with profit taking being one of them. Let’s deconstruct yesterday’s transactions and find out if bearish fears motivated either of the sales mentioned above.

Insider Trading; purchase; Rubber Stamp; Sign; economy; business; finance; stock; price;


An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like an elite fund with the knowledge and resources of the firms we track. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 60 percentage points and returning 118%, while hedge funds themselves have collectively underperformed the market (read the details here).

Norman Hames, who is an Executive Vice President of RadNet Inc. (NASDAQ:RDNT), sold 13,100 shares to lower his remaining holdings to 668,146 shares. So far this month he has disposed of some 50,900 shares. The stock price of the $255.24 million healthcare company has fallen by more than 32% year-to-date. Due to a considerable increase in demand, the company is undergoing an expansion phase, which means higher capital expenditures. The company had lately been facing two key problems, the first one being its operating expense ratio, which stood at 92.9% during the March quarter, but was reduced to 84% in the June quarter, and the management is confident that they can get it to last year’s level by the end of the year. Secondly, RadNet was facing problems profiting from the newer capitated contracts in the first three months of this year, but that too seems to be resolving, as the extra utilization arising out of these contracts normalized in the June quarter. RadNet Inc. (NASDAQ:RDNT)’s largest stockholder within our database, Richard Mashaal‘s RIMA Senvest Management, increased its stake by 14% in the second trimester to 3.56 million shares.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.