Corporate insiders have two means of buying and selling shares of their companies. The first option involves conducting transactions in the open market through a broker like any other retail investor out there does. The second option involves selling or buying shares on a systematic basis through pre-arranged trading plans, referred to as 10b5-1 plans.
Investors are well aware that executives and Board members sell shares for a wide range of reasons that may not be related to their company’s current developments or future outlook. And these 10b5-1 plans enable insiders to diversify their holdings without facing the prospect of insider trading liability, simultaneously avoiding intensifying worries among investors. As Insider Monkey attempts to find information-rich trades only, our team ignores all insider trading made under pre-arranged trading plans. It is nearly impossible to find out which insider sales are conducted because insiders anticipate bad times ahead, but one can at least get rid of those insider transactions that are deemed to be useless for certain. Having this in mind, the following article will discuss possible information-rich insider selling conducted at three U.S. publicly traded companies.
Through extensive research, we have determined that the due diligence that the investors in our database employ, as well as their long-term focus makes them perfect targets to emulate. However, the results of our analysis have also shown that the small-cap picks of these funds can generate much better returns, with the 15 most popular small-cap stocks beating the market by an average of 95 basis points per month (read more details here).
Successful Smart-Lighting Marker Sees Two Insiders Sell Some Shares
Acuity Brands Inc. (NYSE:AYI) has seen two corporate insiders offload shares thus far in July. To start with, Executive Vice President Mark A. Black discarded 2,654 shares on Wednesday at prices varying from $250.19 to $250.40 per share, cutting his overall holding to 38,654 shares. Board member Ray M. Robinson sold 786 shares last Friday at a price tag of $248.55 each. After the recent sale, Mr. Robinson currently owns 2,000 shares.
The well-known smart-lighting maker has seen the value of its shares skyrocket by 384% in the past five years and 35% in the past year alone, so it may be wise for long-serving employees to diversify their holdings. The Atlanta-based company has grown at a rapid pace in recent years as individuals seek controlled, connected lighting products amid strong demand for “Internet of Things” solutions in buildings. Earlier this week, Acuity Brands Inc. (NYSE:AYI) announced the acquisition of DGLogik Inc., a provider of software solutions that enable users to better manage energy usage and improve facility performance. Hence, the acquisition will enhance the acquirer’s expansion into the fast-growing market for intelligent networked systems. Acuity Brands recorded net sales of $851.5 million for the three months that ended May 31, up 24.5% year-over-year.
The lighting company fell out of favor with the hedge funds tracked by our team during the first three months of 2016, as the number of funds invested in the company declined to 22 from 31 quarter-over-quarter. Robert Joseph Caruso’s Select Equity Group was the owner of 653,045 shares of Acuity Brands Inc. (NYSE:AYI) at the end of March.
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Let’s move on to the next page of this article, where we will discuss the insider selling activity registered at two other companies.