The third quarter earnings season is well underway at the moment, with more than 67% of the companies included in the Standard and Poor’s 500 having reported their financial results for the latest quarter. It is worth mentioning that 76% of these companies have reported stronger-than-expected earnings, while 47% of them have registered sales above estimates, according to FactSet. In fact, the third quarter blended earnings (i.e. a mix of actual returns for the companies that have already reported earnings and estimates for the remainder) decline is 2.2%, compared to the previously anticipated decline of 5.2%. Of course, this is good news for market participants, so it is no surprise to see insiders acquiring shares of their companies at the moment. The Insider Monkey team identified three companies with heavy insider buying activity recently, so let’s attempt to find out what might have propelled insiders to buy shares of these companies.
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Let’s start off by looking into the insider trading activity at Twitter Inc. (NYSE:TWTR). Chief Financial Officer Anthony Noto purchased 5,230 shares on Monday at a weighted average price of $29.09. After the recent acquisition, the CFO currently holds a stake of nearly 1.29 million shares, 1.03 million of which are represented by restricted stock unites (RSUs) and 24,880 of which are jointly held with his spouse. Just recently, Twitter Inc. (NYSE:TWTR) posted third quarter earnings and revenues that surpassed analysts’ estimates, but the company’s lower-than-expected guidance for the fourth quarter disappointed investors. Specifically, the social media company reported earnings per share of $0.10 on revenue of $569 million, compared to analysts’ EPS expectations of $0.05 on $560 million in revenue. Twitter’s management anticipates its fourth quarter revenue to be in the range of $695 million-to-$710 million, but analysts had previously anticipated a top-line of over $740 million. In the meantime, the stock is nearly 19% in the red year-to-date, so the CFO may be buying shares believing they will rebound in the near future. Daniel Benton’s Andor Capital Management owned exactly 1.5 million shares in Twitter Inc. (NYSE:TWTR) at the end of the second quarter.
The next page of the article discloses the insider buying activity at ITT Corp and Quidel Corporation.
ITT Corp (NYSE:ITT) recently registered the first insider purchase of its shares in the past two years or so. Director Geraud Darnis acquired a 10,000-share block on Monday at prices ranging from $38.68-to-$39.93, enlarging his stake to 11,646 shares. The manufacturer of highly engineered solutions for the energy, transportation and industrial markets has seen its shares advance by 19% since the beginning of the fourth quarter, but they are still down by slightly more than 1% year-to-date. The foreign exchange headwinds and the struggling oil and gas and industrial markets have put some downward pressure on the company’s operations and results over the past few months. Even so, ITT Corp (NYSE:ITT)’s management has been successful in enhancing operational performance and implementing cost reduction efforts so as to tackle the challenging environment. The stock is currently trading at a trailing P/E ratio of 12.40, which is significantly below the median of 22.65 for the companies included in the S&P 500. Ken Griffin’s Citadel Investment Group was among the top shareholders of ITT Corp (NYSE:ITT) at the end of the second quarter, with 1.60 million shares.
Lastly, Quidel Corporation (NASDAQ:QDEL) recently registered insider buying activity for the first time this year. Douglas C. Bryant, President and Chief Executive Officer since March 2009, reported purchasing 20,000 shares on Friday at a weighted average price of $19.76. Following this acquisition, the CEO currently holds an ownership stake of 249,404 shares. Just a few days ago, the provider of rapid diagnostic testing solutions, cellular-based virology assays and molecular diagnostic systems disclosed its third quarter earnings report. Quidel Corporation (NASDAQ:QDEL) reported total revenues of $46.8 million, which were up by 14% quarter-over-quarter. The company’s net loss tightened quite significantly to $0.8 million or $0.02 per share, compared to $5.8 million or $0.17 per share reported a year ago. The promising financial results for the third quarter put a stop to the downtrend the company’s shares had been riding throughout the year. However, the stock is still down by more than 28% since the beginning of the year. Israel Englander’s Millennium Management owned nearly 382,000 shares of Quidel Corporation (NASDAQ:QDEL) at the end of the June quarter.