Trump Victory Prompts Morgan Stanley (MS) Executives to Jettison Shares Amid Surge in Financial Stocks, Plus Other Noteworthy Insider Trading

Previous research shows that the security purchases and sales conducted by insiders can offer an accurate reflection of the future prospects of their companies, so keeping tabs on insider trading behavior may be a key piece of information for various types of investors. After all, corporate insiders possess a broad set of skills and characteristics that can be also used to describe a value-oriented investor.

Some of these skills and characteristics include: an extensive knowledge and understanding of businesses and industries; a tendency to employ a contrarian approach to investing, which involves buying low and selling high; as well as a predisposition to maintain a long-term perspective. With that said, insider trading activity, especially insider buying, represents a strong source of information for long-term-oriented investors. As legendary investor Peter Lynch once said, corporate insiders may sell shares of their own companies for a variety of reasons such as estate planning or diversification benefits, but there is only one reason they buy – because they think the price is going up. Without further ado, let’s have a look at a set of noteworthy insider transactions reported with the SEC on Thursday.

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CEO of Battered Healthcare-Focused REIT Purchases Shares

Let’s begin our discussion with Healthcare Realty Trust Inc. (NYSE:HR), where a leading executive bought a sizable block of shares this week. President and CEO David R. Emery bought 68,000 shares on Wednesday at a weighted average price of $28.84 per share, all of which are held in a trust fund. After the recent purchase, Mr. Emery currently owns an aggregate of 794,406 shares via the trust fund.

The real estate investment trust specializing in real estate properties associated with the delivery of outpatient healthcare services across the United States has seen the value of its shares plunge by 21% in the past three months. Healthcare Realty Trust Inc. (NYSE:HR)’s shares took a hit after the news of Donald Trump’s victory in the presidential election emerged. There is strong uncertainty in the market on how a Trump presidency will handle the Affordable Care Act, which the president-elect harshly criticized throughout the campaign. Trump said he would replace the so-called ObamaCare with “something terrific,” an extremely detailed and ingenious strategy I must admit. Healthcare Realty Trust had investments of around $3.5 billion in 202 real estate properties located in 29 states at the end of September, totaling around 14.5 million square feet. Ken Griffin’s Citadel Advisors was the owner of nearly 53,000 shares of Healthcare Realty Trust Inc. (NYSE:HR) at the end of the third quarter.

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

CEO of Struggling U.S. Subprime Lender Buys the Dips

The man in charge of OneMain Holdings Inc. (NYSE:OMF) also acquired some shares earlier this week. President and CEO Jay N. Levin snatched up 50,000 shares on Thursday at prices varying from $17.99 to $18.50 per share. Mr. Levin currently holds an ownership stake of 3.08 million shares after the recent purchase.

The purchase comes shortly after the biggest subprime lender in the United States released its third-quarter results, which hit the company’s stock price by nearly 40% on Tuesday. OneMain Holdings Inc. (NYSE:OMF) slashed its full-year 2016 and 2017 guidance for growth in its loan portfolio and its preferred measure of earnings. The company’s top management blamed the increasing competition for loans to borrowers with sub-660 FICO scores for the slowing receivables growth, pointing out that credit card companies have targeted lower-FICO borrowers. The subprime market has been growing rapidly in recent years amid sluggish growth in wages and the loose monetary policy pursued by the U.S. Federal Reserve. OneMain’s top management also blamed the challenging integration of the branch networks of Springleaf and OneMain, which merged in mid-November of 2015. The shares of OneMain are down by 56% since the beginning of the year. Citadel Advisors owns 12,464 shares of OneMain Holdings Inc. (NYSE:OMF) as of September 30.

CFO of Ratio Frequency Solutions Specialist Buys Some Shares

An important member of Qorvo Inc. (NASDAQ:QRVO)’s executive team piled up some shares this week as well. Chief Financial Officer Mark J. Murphy bought 10,000 units of common stock on Wednesday at prices that fell in the range of $51.60 to $51.67 per unit. After the recent acquisition, Mr. Murphy currently holds an ownership stake of 65,270 shares.

The aforementioned purchase comes after the radio frequency solutions provider released mixed results for the second quarter of its fiscal year 2017 that ended October 1, as well as released disappointing guidance for the current quarter. Analysts at MKM Partners reiterated their ‘Buy’ rating on Qorvo Inc. (NASDAQ:QRVO) but reduced their price target on the stock to $64 from $71, saying that “management likely has little credibility in the eyes of skeptical investors on an ambitious margin improvement plan on the next six quarters.” The company’s fiscal second-quarter revenue grew by 22.1% year-over-year to $864.7 million. Qorvo shares are 1% in the green this year. Ken Fisher’s Fisher Asset Management reported owning 1.14 million shares of Qorvo Inc. (NASDAQ:QRVO) through the current round of 13F filings.

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

Former CEO of New England’s Largest Energy Delivery Company Offloads Shares

One insider at Eversource Energy (NYSE:ES) offloaded a great deal of shares at the beginning of the week. Thomas J. May, Chairman of the Board of Eversource Energy, discarded 200,000 shares on Tuesday at prices that fell between $55.00 and $55.31 per share. Mr. May, President and CEO of the company from April 2012 until May 2016, currently holds a direct ownership stake of 679,499 shares.

Eversource Energy (NYSE:ES), New England’s largest energy delivery company, has seen its market capitalization increase by 2% since the start of the year. In mid-October, analysts at Argus cut their price target on Eversource Energy to $59 from $64, reflecting a decline in industry-wide price-to-earnings multiples since the beginning of the third quarter, as well as their expectations for an interest rate increase by the Federal Reserve in December. “Utilities as a group are heavily debt-financed and aggregate interest charges are likely to rise in the event of a rate hike. In addition, in a rising interest rate environment, equity investors seeking income often move away from utility shares and turn to the bond market, as fixed-income rates begin to rise,” said one of Argus’ analysts in October.

Executives at Morgan Stanley Jettison Shares

Two members of Morgan Stanley (NYSE:MS)’s executive team discarded some shares earlier this week. To start with, Daniel Simkowitz, the Head of Investment Management at Morgan Stanley since October 2015, liquidated 60,119 shares on Thursday at prices varying from $37.24 to $38.00 per share, cutting his overall holding to 262,784 shares. Chief Financial Officer Jonathan Pruzan sold 44,625 shares on Tuesday at prices that fell between $33.78 and $34.11 per share. Mr. Pruzan currently owns an aggregate of 210,813 shares.

The shares of banks, stock exchanges, and brokers surged after news emerged that Republican presidential candidate Donald Trump will become the next President of the United States, and Morgan Stanley (NYSE:MS)’s shares were no exception. Retail and institutional investors channeled more capital into financial and pharmaceutical securities on the expectation that a Republican-led government would loosen regulations governing the two industries. In mid-August, activist investor Jeffrey Ubben of ValueAct Capital initiated a 38 million-share stake in Morgan Stanley, suggesting that the market was undervaluing the diversified financial services company. Morgan Stanley’s shares are 18% in the green this year. Richard S. Pzena’s Pzena Investment Management cut its holding in Morgan Stanley (NYSE:MS) by 13% during the September quarter, to 11.34 million shares.

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