A Look at Some Noteworthy Insider Purchases and Sales

With nearly all companies included in the S&P 500 Index having released their earnings reports for the first quarter of 2016, the insider trading activity has been gaining steam in the past several weeks. According to FactSet, the blended first-quarter earnings drop totals 6.8%, which marks the fourth consecutive quarterly earnings decline. It is quite evident that the investment community is witnessing a so-called “earnings recession”, but there is good reason to believe the bottom-line figures of U.S.-listed companies will recover in the second half of 2016. Stabilizing crude oil prices, weakness of the U.S. dollar and improving U.S. economy are the main factors that will most likely end the so-called “earnings recession” in the foreseeable future. Meanwhile, last week’s overall dollar volume of all insider purchases slightly decreased relative to the volume recorded for the previous week, whereas the volume of insider selling increased week-over-week. Given that insider trading metrics play a major role in some investors’ investment strategies, the following article will discuss the most noteworthy insider buying and selling activity registered this past week.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

This Data Analytics Company Had Executive Chairman Buy a Massive Bulk of Shares Last Week

Executive Chairman of IDI Inc. (NYSEMKT:IDI)’s Board of Directors, Michael Brauser, purchased 419,530 shares on Wednesday at $5.25 apiece, all of which are held by Birchtree Capital LLC. Birchtree Capital, of which Mr. Brauser is the manager, currently owns 1.37 million shares. The Executive Chairman also holds an indirect ownership stake of 2.06 million shares held by Grander Holdings Inc., of which Mr. Brauser is a trustee, as well as a direct ownership of 63,400 shares excluding restricted stock units.

The data and analytics company has seen its market capitalization drop by 30% since the beginning of the year. IDI Inc. (NYSEMKT:IDI), formerly known as Tiger Media Inc., recorded total revenue of $39.42 million for the first quarter of 2016, up from a mere $1.26 million reported for the same quarter of 2015. The massive increase in the company’s top-line figure was mainly attributed to the acquisition of Fluent Inc., a leader in people-based digital marketing and customer acquisition, completed in December 2015. Israel Englander’s Millennium Management LLC owns 12,399 shares of IDI Inc. (NYSEMKT:IDI) as of the end of the March quarter.

Let’s head to the next two pages of this insider trading article, where we will reveal major insider purchases and sales witnessed at four other companies this past week.

This REIT’s President Bought a Large Block of Shares Last Week

According to a fresh Form 4 filing, New York Mortgage Trust Inc. (NASDAQ:NYMT)’s President, Kevin Donlon, snapped up 200,000 shares on Tuesday at prices that ranged from $5.61 to $5.75 per share. After the recent sizable purchase, Mr. Donlon currently owns 206,000 shares of New York Mortgage Trust.

New York Mortgage Trust Inc. (NASDAQ:NYMT) operates as a real estate investment trust (REIT) focused on acquiring, financing and managing mortgage-related assets and financial assets. Just recently, the Department of Financial Services, the primary regulator for financial institutions operating in New York, sent subpoenas to several firms, including New York Mortgage Trust, engaged in seller-financed home sales to find out whether housing deals were offered to low-income buyers who are not eligible for mortgages. In seller-financed housing transactions, the sellers finance home purchases performed by low-income individuals and can require interest rates that are significantly higher than the rates of traditional mortgages, a practice considered as predatory and detrimental to buyers. Shares of New York Mortgage Trust have gained 4% year-to-date. Jim Simons’ Renaissance Technologies LLC acquired a new stake of 13,400 shares of New York Mortgage Trust Inc. (NASDAQ:NYMT) during the first quarter of 2016.

The Man in Charge of This Insulin Pump Maker Bought Some Shares Last Week

Insulet Corporation (NASDAQ:PODD)’s President and Chief Executive Officer, Patrick J. Sullivan, bought 30,000 units of common stock on Tuesday and 15,000 units on Wednesday at prices varying from $26.82 to $27.14 per unit. After the recent purchase, Mr. Sullivan holds a direct ownership stake of 217,795 shares.

Shares of Insulet Corporation, a so-called leader in tubeless insulin pump technology, have plummeted by 24% since the start of 2016, partly owing to UnitedHealth Group Inc. (NYSE:UNH)’s announcement that Medtronic PLC (NYSE:MDT) would serve as its preferred insulin pump supplier for most of its clients. Some analysts believe Insulet is mostly isolated from UnitedHealth’s decision given that the health carrier’s new policy does not relate to pediatric patients, who account for a high share of Insulet’s OmniPod new patient starts. There were 21 hedge funds from our system invested in Insulet at the end of March, amassing 23% of the company’s outstanding shares. David Greenspan’s Slate Path Capital owns 2.72 million shares of Insulet Corporation (NASDAQ:PODD) as of March 31.

The COO of Activision Blizzard Discarded a Massive Block of Shares Last Week

Activision Blizzard Inc. (NASDAQ:ATVI)’s Chief Operating Officer, Thomas Tippl, sold a huge amount of 300,000 shares last Monday at prices that fell between $38.60 and $39.48 per share, all of which were held by the Thomas and Laura Tippl Family Trust. Following the massive sell-off, Mr. Tippl’s family trust continues to own 596,928 shares.

The shares of the developer and publisher of interactive entertainment have advanced 227% in the past five years and 47% in the past year alone, so Mr. Tipple might have decided to diversify his family’s holdings. In late February, Activision Blizzard Inc. (NASDAQ:ATVI) completed its previously-announced acquisition of King Digital Entertainment plc, an interactive entertainment company that develops games on Android and iOS mobile platforms, as well as on online and social platforms such as Facebook and king.com websites. King shareholders received $18.00 in cash per each share of King owned. Daniel S. Och’s OZ Management added a 4.81 million-share position in Activision Blizzard Inc. (NASDAQ:ATVI) to its portfolio of holdings during the March quarter.

Republic Services’ CEO Unloaded Shares Last Week Near 52-Week High

Donald W. Slager, Chief Executive Officer and President of Republic Services Inc. (NYSE:RSG), discarded 81,800 shares on May 13 at an average price of $48.53 and 24,312 shares on May 16 at an average sale price of $48.46. Following the not-so-distant sales, Mr. Slager currently owns 208,397 shares of Republic Services.

The shares of the second-largest provider of services in the domestic non-hazardous solid waste industry are currently trading near their 52-week high of $48.96 reached on May 13, so Mr. Slager’s decision to offload some shares does not seem surprising at all. The stock is 8% in the green year-to-date. Republic Services Inc. (NYSE:RSG)’s first-quarter revenue grew 3.6% year-over-year to $2.25 billion due to strong pricing and volume growth. The hedge fund sentiment towards the stock increased in the January-to-March period, as the number of hedge funds from our system with stakes in the company climbed to 28 from 21 quarter-over-quarter. Cliff Asness’ AQR Capital Management reported owning 2.62 million shares of Republic Services Inc. (NYSE:RSG) in its latest 13F filing.

Disclosure: None