CEO of Brokerage and Investment Banking Firm Stifel (SF) Keeps Selling Shares, Plus 4 Other Noteworthy Insider Transactions

The extensive literature on insider trading has gone in two different directions, separating insider trading activity into illegal and legal trading. The main distinction is that illegal insider trading remains hidden from the investment community and regulators by relying on various schemes such as nominee sales to mask the fact that insiders are trading. Meanwhile, the legal kind of insider trading requires the disclosure of insider transactions and this disclosure process has been subject to a number of studies aimed at estimating whether insiders earn abnormal returns from their trading, most of which conclude that corporate insiders do indeed generate attractive returns when trading their companies’ shares.

As a general rule, insiders possess information that may not be available to the market as a whole just yet. Therefore, trading on this kind of information provides insiders the opportunity to earn abnormal returns. Numerous studies conclude that Board members and executives are better informed about their companies’ prospects and therefore trade profitably based on this information advantage, purchasing shares in advance of share price increases and selling prior to share price drops. With that in mind, let’s have a look at a fresh list of noteworthy insider trading reported with the SEC on Monday.

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CEO of Large Regional Theme Park Operator Reports Large Purchase of Shares

The man at the helm of Six Flags Entertainment Corp (NYSE:SIX) filed Monday to disclose the purchase of a sizable block of shares. John M. Duffey, Chief Executive Officer and President, reported the purchase of 25,000 shares on Thursday at prices varying from $59.87 to $59.95 per share. The shares are held by Mr. Duffey’s wife as trustee of a family trust that owns 121,000 shares. The CEO also holds a direct ownership stake of 981,464 shares.

The largest regional theme park operator in the world based on the number of parks operated has seen the value of its shares advance by 9% since the beginning of the year. Six Flags Entertainment Corp (NYSE:SIX) operates 18 regional theme and water parks, 16 of which are located in the United States, with one being in Mexico City, and the other being in Montreal. The company has begun talks with the Saudi government to build theme parks as part of Saudi Arabia’s current efforts to diversify its economy away from petroleum and expand its entertainment sector. Six Flags’ expansion into the kingdom will likely include three parks, with the first one anticipated to open in 2020 or 2021. Ken Griffin’s Citadel Advisors added a 689,750-share stake in Six Flags Entertainment Corp (NYSE:SIX) to its pool of holdings during the third quarter.

Let’s head to the next two pages of this insider trading article, where we discuss the fresh insider trading at four other companies.

Board Member at Leading Permian Basin Producer Buys Shares

One member of Occidental Petroleum Corporation (NYSE:OXY)’s Board of Directors snapped up a relatively large block of shares last week. William R. Klesse, Board member since October 2013, purchased 10,000 shares on Friday at prices that fell between $72.11 and $72.15 per share. After the transaction, Mr. Klesse currently owns an aggregate of 57,940 shares.

According to a fresh report by Forbes, Kinder Morgan Inc. (NYSE:KMI) plans to sell its oil and gas properties in the West Texas Permian Basin, with leading Permian Basin producer Occidental Petroleum Corporation (NYSE:OXY) believed to be one potential buyer of those properties. Kinder Morgan’s carbon dioxide-enhanced oil properties are mostly in the Sarcoc area and produce 56,000 barrels of oil per day. The possibility that Occidental Petroleum will be one of the potential buyers appears sound, especially considering the oil and gas company’s recently announced acquisition of 35,000 acres in West Texas for a cash consideration of $2 billion. There were a total of 40 hedge funds in our system with equity stakes in Occidental Petroleum at the end of the third quarter, compared to 38 recorded at the end of the June quarter. Steve Cohen’s Point72 Asset Management had 892,400 shares of Occidental Petroleum Corporation (NYSE:OXY) in its portfolio on September 30.

Newly Appointed Director at Digimarc Buys Shares After Years of “Insider Buying” Silence

According to our insider trading database, no insiders at Digimarc Corp (NASDAQ:DMRC) had purchased shares since late-2011, until last week. Gary DeStefano, elected to the company’s Board of Directors in October, purchased 3,705 shares on Friday and a much larger block of 21,000 shares on Monday at prices ranging from $27.25 to $28.67 per share. Mr. DeStefano currently holds an ownership stake of 30,505 shares.

Digimarc Corp (NASDAQ:DMRC) is the inventor of the Digimarc Discover software and the imperceptible Digimarc Barcode, a unique data carrier repeated across the entire graphic design of a package that is nearly invisible to consumers. The company’s revenue for the first three quarters of 2016 decreased by 3% year-over-year to $16.6 million, mainly reflecting lower subscription revenue. Meanwhile, operating expenses for the same period jumped by 14% year-over-year to $26.2 million, reflecting higher investments in sales, marketing, research, development, and engineering, as the company attempts to gain market acceptance for its aforementioned products. Digimarc’s shares are 23% in the red thus far in 2016. George Soros’ Soros Fund Management initiated a 66,666-share stake in Digimarc Corp (NASDAQ:DMRC) during the three-month period ended September 30.

The final page of this article discusses the fresh insider selling registered at two other companies.

CEO of Brokerage and Investment Banking Firm Keeps Selling Shares

After 15 different insiders at Stifel Financial Corp (NYSE:SF) offloaded shares in late-November, several insiders continue to trim their holdings. For instance, CEO and Chairman Ronald J. Kruszewski liquidated 30,000 shares at $51.39 apiece on Thursday and 30,522 shares for $51.43 each on Friday, cutting his direct ownership stake to 848,340 shares.

The shares of the full service brokerage and investment banking firm have gained 36% in the past three months, partly explaining the aforementioned insider transactions. Earlier this month, Stifel Financial Corp (NYSE:SF)’s brokerage unit and a former executive agreed to pay $24.6 million to resolve claims related to the sale of synthetic debt obligations to five Wisconsin school districts ahead of the financial crisis of 2008. According to the SEC, the multi-million-dollar figure mentioned above, along with prior settlements with the SEC and in private litigations, would entirely compensate the school districts for the losses incurred from those risky investment products. Ken Fisher’s Fisher Asset Management reported ownership of 2.22 million shares of Stifel Financial Corp (NYSE:SF) through the latest round of 13F filings.

Board Member of Racing, Gaming and Online Entertainment Company Discards Shares

One member of Churchill Downs Inc. (NASDAQ:CHDN)’s Board has been consistently offloading shares over the past several weeks or so, which continued late last week. Non-executive Chairman Robert L. Evans, who retired as Executive Chairman and as a member of management in late-September 2015, sold 5,000 shares on Friday for $152.05 each, 10,000 shares at $153.85 apiece last Wednesday, and 1,207 shares at a price tag of $153.75 per share last Monday. Following those transactions, Mr. Evans currently owns a total of 139,842 shares.

The racing, gaming and online entertainment company, which is anchored by the most famous horse race in the world, the Kentucky Derby, has seen its market capitalization rise by 6% since the beginning of the year. Churchill Downs Inc. (NASDAQ:CHDN) represents a leader in brick-and-mortar casino gaming, with around 8,560 gaming machines in six states, as well as represents the largest online account wagering platform for horse racing in the United States. The company’s total net revenue increased by $23.6 million in the September quarter to $303.4 million, mainly reflecting casual and mid-core free-to-play game growth. Matthew Sidman’s Three Bays Capital was the owner of 1.33 million shares of Churchill Downs Inc. (NASDAQ:CHDN) at the end of the third quarter.

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