With U.S. equities collectively ending the first quarter of 2016 in positive territory despite experiencing a massive sell-off at the beginning of the year, the insider selling activity has been gaining steam in the past several weeks. Fresh statistics display that last week’s dollar volume of insider buying declined as compared to the volume registered in the prior week, whereas the volume of insider selling more than doubled week-over-week. Stock market watches should anticipate weakening insider trading activity in the weeks ahead, as most companies enter their trading blackout periods ahead of the first-quarter earnings season, which restrict corporate insiders from buying or selling equities. As insider selling activity have been gaining pace in the past several weeks, some insider trading watchers might find it interesting to take a glance at the most noteworthy insider selling that occurred last week. Insider Monkey examined numerous Form 4 filings submitted with the U.S. SEC on Friday and pinpointed several notable insider sales registered at three companies.
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To start with, Churchill Downs Inc. (NASDAQ:CHDN) had one corporate insider unload a sizable block of shares past week. Non-executive Chairman Robert L. Evans, who stepped down from his role as Executive Chairman in 2015, sold 15,000 shares on Tuesday at a weighted average sale price of $145.55, trimming his overall holding to 165,628 shares.
Churchill Downs Inc. (NASDAQ:CHDN) serves as a diversified racing, gaming, and online entertainment company anchored by the widely-known horse race called The Kentucky Derby. To be more detailed, the company conducts its operations through six operating segments: Racing, Casinos, TwinSpires, Big Fish Games, Other Investments and Corporate. The company’s 2015 total net revenue reached $1.21 billion, increasing from $812.22 million in 2014 and $779.03 million in 2013. The $400.1 million net revenue increase was mainly driven by the acquisition of Big Fish Games Inc., a producer and distributor of social casino, casual and mid-core games, in December 2014. The transaction involved an upfront purchase price of $485 million in cash and stock, with an additional payment of up to $350 million that may be paid based on 2015 earnings growth. The Big Fish Games acquisition upped the company’s 2015 top-line figure by $399.8 million. Meanwhile, net income totaled $65.20 million for 2015, up from $46.36 million in 2014 and $54.90 million in 2013. Shares of Churchill Downs have advanced 262% in the past five years, after having gained 28% in the past year alone. Therefore, the recent insider selling at the company should not come as a surprise for shareholders and other stock market watchers. The stock is priced around 19.0-times expected earnings, versus the forward P/E multiple of 26.3 for the Casinos and Gaming industry and the ratio of 17.5 for the S&P 500 benchmark. The hedge fund sentiment towards Churchill Downs declined during the December quarter, with the number of funds invested in the company dropping to 22 from 26 quarter-on-quarter. Those 22 funds amassed roughly 34% of the company’s outstanding common stock at the end of December 2015. Matthew Sidman’s Three Bays Capital upped the stake in Churchill Downs Inc. (NASDAQ:CHDN) by 19% in the fourth quarter of 2015, ending the year with 1.37 million shares.
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The upcoming pages of this article reveal the insider selling witnessed at Medical Properties Trust Inc. (NYSE:MPW) and Realty Income Corp (NYSE:O).
