Two Companies Witness Insider Selling after Releasing Strong Results, Plus Insider Buying at Three Other Firms

As a general rule, there are numerous reasons corporate insiders sell shares of their own companies. For instance, insiders may seek to diversify their holdings, buy a new house, or take an expensive vacation. This makes it practically impossible to know the actual reason behind any particular insider sale unless insiders decide to specify the motives of their sales in the Form 4 filings submitted with the SEC. Therefore, securities sales completed by Board members and executives are not viewed as powerful indicators as insider purchases.

Nonetheless, corporate insiders are financially-educated individuals, so they would not be as likely to sell shares if they anticipated positive catalysts that could drive their company’s share price up in the near-term. Hence, heavy insider selling, particularly in the form of clusters of selling, may serve as an indicator that insiders believe the share price of their company’s stock is approaching or exceeding its “fair” value. After processing numerous Form 4 filings submitted with the SEC on Monday, Insider Monkey compiled a list of five companies that had noteworthy insider trading.

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Two Insiders at Healthcare-Focused REIT Buy Shares on Stock Price Weakness

Let’s begin our discussion by analyzing the insider buying activity at Omega Healthcare Investors Inc. (NYSE:OHI), where two corporate insiders piled up more shares last week. To start with, Chief Executive Officer C. Taylor Pickett bought 21,800 shares on Friday at a price tag of $29.26 each, with 4,000 shares of those shares being held in a family trust that currently owns 8,200 shares. Mr. Pickett holds a direct ownership stake of 276,261 following the recent purchase.

The shares of the largest owner of post-acute care facilities in the United States have dipped by 15% in the past three months, which likely explains the recent spike in insider buying at the company. Omega Healthcare Investors Inc. (NYSE:OHI) has increased its quarterly dividend for 17 consecutive quarters, with the current dividend of $0.61 per share yielding an attractive 8.01% annually. The real estate investment trust that invests in healthcare-related real estate properties located in the United States and the United Kingdom reported net income of $82.1 million on operating revenues of $224.6 million for the third quarter, as compared to net income of $83.3 million on operating revenues of $202.0 million recorded a year ago. Jim Simons’ Renaissance Technologies LLC added a 599,930-share stake in Omega Healthcare Investors Inc. (NYSE:OHI) to its portfolio during the third quarter.

In the next two pages of this article, we will discuss several insider purchases and sales reported with the SEC on Monday.

CIO of Mortgage REIT Buys Voluminous Block of Shares

One of the most important members of Annaly Capital Management Inc. (NYSE:NLY)’s executive team snapped up a sizeable amount of shares last week. Chief Investment Officer David L. Finkelstein bought 100,000 shares on Friday at a price of $10.30 per share, doubling his overall holding to 200,000 shares.

Annaly Capital Management Inc. (NYSE:NLY) operates as a real estate finance company that predominantly invests in various types of Agency mortgage-backed securities and related derivatives to hedge these investments. After the mortgage REIT released third-quarter financial results in line with analysts’ expectations, an analyst at FBR & Co. praised the company for the stable results delivered over the course of the last year. “This is the fifth consecutive quarter of earnings in the $0.30/share range despite a wide range of market conditions over the last several quarters. We believe that this best demonstrates the benefits of the company’s diversified investment portfolio and reinforces our thesis that NLY’s more defensive asset portfolio with a heavier skew toward non-credit/more-liquid agency MBS positions it well to outperform peers,” said an FBR & Co. analyst recently. The mortgage REIT’s shares are 9% in the green this year. Richard S. Pzena’s Pzena Investment Management reported owning 20,355 shares of Annaly Capital Management Inc. (NYSE:NLY) in its 13F filing for the third quarter.

Board Member of Apparel Licensing and Brand Management Company Buys Shares After Stock Price Plunge

One member of Sequential Brands Group Inc. (NASDAQ:SQBG)’s boardroom acquired a significant block of shares earlier this week. Director Al G. Gossett bought 100,000 shares on Monday at prices varying from $4.29 to $4.50 per share. After the recent purchase, Mr. Gossett currently owns an aggregate of 409,669 shares.

The massive insider purchase comes as the shares of the apparel licensing and brand management company have plunged by a disturbing 37% in the past five days after the release of its third-quarter earnings report. Sequential Brands Group Inc. (NASDAQ:SQBG) reported total revenue of $42.0 million for the third quarter, which rose by 83% year-over-year. Despite reporting better-than-expected revenue, the company cut the full-year earnings guidance, which triggered a massive drop in the share price. Sequential Brands Group, which owns a portfolio of consumer brands in the fashion, home, athletic and lifestyle categories, anticipates net income in the range of $7.7 million-to-$11.0 million, down from the previous guidance range of $12.7 million to $14.6 million. The downward revision of the earnings guidance reflects costs associated with its headquarter lease. The company has lost 43% of its market capitalization since the start of the year. David Keidan’s Buckingham Capital Management had 2.60 million shares of Sequential Brands Group Inc. (NASDAQ:SQBG) in its portfolio at the end of September.

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

Executive at IT Solutions Provider Offloads Shares After Reporting Record Net Sales

Let’s move on to the fresh insider selling observed at CDW Corp (NASDAQ:CDW). Douglas E. Eckrote, Senior Vice President of Strategic Solutions and Services for CDW, discarded 71,372 shares on Thursday for $44.05 each, 8,162 shares at $43.96 apiece and 466 shares for $43.99 each on Friday. Following this series of sales, Mr. Eckrote currently owns 170,461 shares.

The recent insider selling comes after the provider of technology solutions to business, government, education and healthcare in the United States, Canada and the United Kingdom reported record sales for the third quarter. CDW Corp (NASDAQ:CDW) reported net sales of $3.71 billion, up from $3.50 billion posted in the third quarter of 2015. The company’s Board of Directors also approved a 49%-increase in the quarterly cash dividend paid to shareholders. The upped quarterly dividend of $0.16 per share equates to a current annual dividend yield of 1.44%. CDW’s shares are 5% in the green this year. Richard S. Pzena’s Pzena Investment Management was the owner of 146,082 shares of CDW Corp (NASDAQ:CDW) at the end of September.

CEO of Growing Medical-Device Maker Sell Some Shares

The man in charge of Stryker Corporation (NYSE:SYK) also unloaded some shares last week. Chairman and CEO Kevin A. Lobo liquidated 26,306 units of common stock on Thursday at prices varying from $115.57 to $116.14 per share. After the recent sale, Mr. Lobo currently owns an aggregate of 27,880 shares.

The medical-device maker has seen its market capitalization jump by 30% since the start of the year. Just recently, Stryker Corporation (NYSE:SYK) released better-than-expected results for the third quarter and lifted the low-end of its earnings per share guidance for the year. The company reported net sales of $2.83 billion, which rose by 17.1% year-over-year. Excluding the impact of acquisitions, Stryker’s net sales in constant currency increased by 7.5% year-on-year, reflecting increased unit volume due to higher shipments of neurotechnology, endoscopy, trauma and extremities, instruments and knee products. Donald Yacktman’s Yacktman Asset Management had 1.26 million shares of Stryker Corporation (NYSE:SYK) in its portfolio at the end of the third quarter.

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