Well-known investment guru Peter Lynch, the former manager of the Magellan Fund at Fidelity Investments, once said: “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.” To that end, the investment community usually perceives insider buying as a bullish signal and the management teams of publicly traded companies know that.
Earlier this week, a London-based supplier of silicon metal, silicon-based specialty alloys and ferroalloys called Ferroglobe PLC announced that several members of its senior management team, including the Executive Vice-Chairman, Chief Executive Officer, Chief Financial Officer, among others, made open-market purchases of shares of Ferroglobe in the past week. Such clusters of insider buying are great news for the investment community. As Dr. Inan Dogan, the founder of Insider Monkey, said in a 2015 interview: “One insider might overestimate a company’s prospects, but there is higher certainty when many insiders are buying.” With that in mind, let’s proceed to the discussion of a set of noteworthy insider transactions reported with the U.S. SEC on Thursday.
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Board Member of Leading Beauty Retailer Buys Shares
One member of Ulta Salon, Cosmetics & Fragrance Inc. (NASDAQ:ULTA)’s boardroom purchased a voluminous block of shares earlier this week, the second insider purchase at the company so far in 2016. Board member Dennis K. Eck, an Interim Chief Executive Officer of the company from February 2013 to July 2013, purchased 11,000 shares on Wednesday at prices ranging from $246.92 to $247.00 per share. Following the recent purchase, Mr. Eck currently holds an ownership stake of 498,530 shares.
The largest beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care products and hair care products and salon services has seen its market cap rise by 31% since the beginning of 2016. Soon after Ulta Salon, Cosmetics & Fragrance Inc. (NASDAQ:ULTA) released stronger-than-expected second-quarter results, analysts at Deutsche Bank reaffirmed their ‘Hold’ rating, but raised their price target on the stock to $280 from $225, citing a “terrific” quarter and higher-than-anticipated comparable store-sales of 14.4% versus consensus estimates of 12.7%. John Griffin’s Blue Ridge Capital reported owning 1.06 million shares of Ulta Salon, Cosmetics & Fragrance Inc. (NASDAQ:ULTA) through the latest round of 13Fs.
The next two pages of this article discuss a series of other noteworthy insider transactions reported with the SEC on Wednesday.
New Board Member at Leading Distributor of Roofing Materials Acquires New Stake
A freshly-appointed member of Beacon Roofing Supply Inc. (NASDAQ:BECN)’s Board of Directors initiated a new stake in the company this week. Carl T. Berquist, appointed to the company’s Board in late June, snapped up a new stake of 5,000 shares on Wednesday at a price tag of $44.81 each. Although the sole purpose of this purchase might be to show that the Board member’s interests are aligned with shareholders’ interests, the transaction still represents a positive sign.
The second-largest distributor of residential and non-residential roofing materials in the United States and Canada has seen the value of its stock gain 8% since the beginning of the year. In early October, 2015, Beacon Roofing Supply Inc. (NASDAQ:BECN) completed the $1.17 billion cash-and-stock acquisition of Roofing Supply Group, which aimed at strengthening Beacon Roofing Supply’s position as the largest publicly traded roofing materials and related products distributor in the nation. More importantly, the company completed an additional seven strategic acquisitions in the nine-month period that ended June 30, which enhanced the company’s geographic footprint. Ken Griffin’s Citadel Advisors LLC upped its position in Beacon Roofing Supply Inc. (NASDAQ:BECN) by 59% during the April-to-June period to 1.74 million shares.
New Director at Hot Small-Cap Biotech Acquires Stake in His Company
Similar to the case discussed above, a newly-appointed member of Agenus Inc. (NASDAQ:AGEN)’s Board of Directors also acquired a new stake in his company. Ulf Wiinberg, who joined the company’s boardroom in May, snatched up a 30,000-share stake on Tuesday at a price of $6.29 per share.
The shares of the immuno-oncology company, which focuses on the development of revolutionary new treatments that engage the body’s immune system to help patients suffering from cancer, are 43% in the green thus far in 2016. Agenus Inc. (NASDAQ:AGEN) has formed collaborations with companies such as Incyte Corporation (NASDAQ:INCY), Merck & Co. Inc. (NYSE:MRK) and Recepta Biopharma SA to help advance its anti-cancer checkpoint inhibitor platform. Through these collaborations, the company has more than a dozen antibody programs that started Phase 1 trials in 2016. There were a total number of 11 hedge funds followed by Insider Monkey invested in Agenus at the end of the second quarter, which amassed 14% of the company’s total number of outstanding shares. Jim Simons’ Renaissance Technologies LLC was the owner of 517,017 shares of Agenus Inc. (NASDAQ:AGEN) at the end of the June quarter.
The final page of this article will discuss noteworthy insider selling recorded at two other companies.
Several Insiders at Provider of Fuel Cards and Workforce Payment Products Sell Shares
Five different insiders at FleetCor Technologies Inc. (NYSE:FLT) offloaded shares this week, two of whom sold freshly-exercised employee stock options. However, we will have a look at the “information-rich” set of insider trades only, which excludes those trades connected to employee stock options. To start with, Armando Lins Netto, CEO Brazil at FleetCor, sold out his entire stake of 16,003 shares on Tuesday at a price of $167.75 per share. Board member Joseph W. Farrelly offloaded 1,200 shares on Wednesday for $168.73 each, cutting his ownership to 3,224 shares. Last but certainly not least, Chief Executive Officer and President Ronald F. Clarke discarded 100,000 shares on Tuesday, 63,617 shares on Wednesday and 80,000 shares on Thursday. Following these transactions, Mr. Clarke currently holds an ownership of 205,666 shares. All these shares were sold at a weighted average price of $167.37 per share.
The independent global provider of fuel cards, commercial payment and data solutions, stores value solutions, and workforce payment products and services has seen its market value spike by 17% since early January. FleetCor Technologies Inc. (NYSE:FLT)’s consolidated revenues for the three months that ended June 30 were $417.9 million, up 3.3% year-over-year. The increase reflected organic growth in certain payment programs driven by both volume and revenues increases. Thomas Steyer’s Farallon Capital has 1.25 million shares of FleetCor Technologies Inc. (NYSE:FLT) among its holdings as of the end of the second quarter.
Chairman of Axis Capital’s Board Discards Shares
A highly-informed and influential insider at Axis Capital Holdings Limited (NYSE:AXS) unloaded two blocks of shares over the past several days or so. Michael A. Butt, Chairman of the Board, discarded 19,036 shares last Friday and 31,345 shares on Tuesday at prices varying from $57.00 to $57.07 per share. After these transactions, Mr. Butt currently owns around 1.17 million shares of Axis Capital.
The shares of the Bermuda-based global provider of specialty lines insurance and treaty reinsurance products are up by 1% so far this year. Axis Capital Holdings Limited (NYSE:AXS)’s gross premiums written were $1.3 billion in the second quarter, marking an increase of 11% year-on-year. The increase reflects growth of 26% in the reinsurance segment and growth of 3% in the insurance segment. The number of smart money investors from our system invested in Axis Capital fell to 11 from 16 during the June quarter. Richard S. Pzena’s Pzena Investment Management was the largest equity holder of Axis Capital Holdings Limited (NYSE:AXS) within our database, holding 5.32 million shares as of June 30.