Cluster of Insider Buying at Struggling Bake-at-Home Pizza Chain, Plus Other Noteworthy Insider Transactions

Although it is generally known that corporate insiders buy shares of their own companies for one simple reason (they believe Mr. Market severely undervalues those shares), insider trading watchers should still be very careful when incorporating insider buying data into their stock analysis process. It is true that insider purchases tend to beat broader market gauges on aggregate, but there may be some insider buying that does not have predictive power. For that reason, Insider Monkey would like to lay out three tips that could possibly enable retail investors to identify informative insider purchases.

The most important tip of the three is to look for clusters of insider buying, which usually suggest that there is a consensus among insiders that their companies’ shares are undervalued. Another tip is to avoid insider transactions conducted under pre-arranged trading plans, as fresh research shows that spur-of-the-moment insider purchases generate higher returns than those conducted under trading plans. Last but not least, insider trading watchers should look for long-time insiders who purchase shares for the first time. With that in mind, let’s have a look into a set of noteworthy insider transactions reported with the SEC after Thursday’s Thanksgiving holiday.

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Cluster of Insider Buying at Struggling Take ‘N’ Bake Pizza Chain

Four different insiders at Papa Murphy’s Holdings Inc. (NASDAQ:FRSH) piled up some shares last week before Thursday’s Thanksgiving holiday. To start with, Jean M. Birch, Chair of the company’s Board, purchased 10,000 shares on Tuesday at prices varying from $4.58 to $4.85 per share, lifting her overall holding to 20,095 shares. Dan Harmon, the Senior Vice President of Operations at Papa Murthy’s, bought a new stake of 10,515 shares at the beginning of the previous week, a stake held by an IRA trust for the benefit of the executive. Mr. Harmon also holds a direct ownership stake of 16,114 shares. Chief Marketing Officer Brandon Solano snapped up 10,001 shares on Tuesday at prices that fell between $4.73 and $4.75 per share. Mr. Solano currently owns an aggregate of 30,002 shares after the recent purchase. Last but not least, Victoria Blackwell, Chief Legal Officer and Senior Vice President of Talent, acquired a new stake of 215 shares on Tuesday at $4.64 apiece, a stake held in a custodial account for the benefit of Ms. Blackwell’s minor child.

The franchisor and operator of a Take ‘N’ Bake pizza chain has seen its market capitalization plunge by 58% since the start of the year, as the company’s bake-at-home pizza business has clearly lagged behind rival businesses. Nonetheless, after suffering a disappointing quarter due to an increasingly competitive environment, both in the pizza category and more broadly, Papa Murphy’s Holdings Inc. (NASDAQ:FRSH) does have a plan to turn things around. The pizza chain plans to launch its first-ever national advertising campaign next year, set to run for at least six weeks. Will this represent an inflection point for Papa Murthy’s business? Only time will tell. Nevertheless, the company’s insiders seem confident in the future prospects of its business, as reflected by the insider buying discussed above. Israel Englander’s Millennium Management owns 30,000 shares of Papa Murphy’s Holdings Inc. (NASDAQ:FRSH) as of September 30.

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

Board Member at Leader in Recovery Audit and Analytics Services Boosts Holding

One member of PRGX Global Inc. (NASDAQ:PRGX)’s Board of Directors bought a relatively sizable block of shares last week. Board member Joseph E. Whitters snatched up 12,500 shares on Tuesday at prices ranging from $5.40 to $5.50 per share. Following the recent purchase, Mr. Whitters currently holds an ownership stake of 108,153 shares.

The aforementioned Board member is not the only one who believes the shares of the leader in recovery audit and spend analytics services are undervalued. Just recently, Northern Right Capital Management L.P. filed a Form 13D with the SEC revealing a 5.9%-stake in PRGX Global Inc. (NASDAQ:PRGX). The filing also specified that the stake was purchased on the belief that the shares represented an attractive investment opportunity when purchased. More importantly, Northern Right Capital Management’s founder, Matthew A. Drapkin, was recently appointed to the company’s Board of Directors – a move that could assist the company going forward, especially considering that Northern Right is very supportive of PRGX’s current CEO. The shares of PRGX Global have gained 47% year-to-date. David Park’s Headlands Capital added a 2.77 million-share stake in PRGX Global Inc. (NASDAQ:PRGX) to its portfolio during the third quarter.

Board Member of Investor in Renewable Energy Buys Shares

A member of MMA Capital Management LLC (NASDAQ:MMAC)’s Board also purchased some shares during the trading week that was shortened by the Thanksgiving holiday. Board member Lisa Marie Roberts, who served as the Chief Financial Officer of MMA Capital from late-August 2011 to mid-July 2015, purchased 2,000 shares on Tuesday for $17.81 each, lifting her ownership to 9,125 shares.

MMA Capital Management LLC (NASDAQ:MMAC), which partners with institutional capital to create and manage investments in affordable housing and renewable energy, recently agreed to terms with a leading special situations investment platform to create a solar lending joint venture called Renewable Energy Lending LLC. The newly-created joint venture is set to provide financing for the construction and ongoing operations of solar power projects across North America. The shares of MMA Capital Management are 24% in the green this year. Jim Simons’ Renaissance Technologies was the owner of around 19,000 shares of MMA Capital Management LLC (NASDAQ:MMAC) at the end of the September quarter.

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

More Insider Selling at Linear Technology Ahead of Merger

Shortly after the man in charge of Linear Technology Corporation (NASDAQ:LLTC), Lothar Maier, had offloaded 274,642 shares earlier this month, a number of insiders followed suit. To begin with, Erik M. Soule, Vice President of Signal Conditioning Products, discarded 15,810 shares on Wednesday at $62.30 apiece, cutting his holding to 110,326 shares. Donald P. Zerio, Chief Financial Officer and Vice President of Finance, sold 1,169 shares for $62.18 each on Tuesday and 957 shares at $62.30 apiece on Wednesday. After the recent sales, Mr. Zerio currently holds an aggregate of 76,215 shares.

As already mentioned in one of our previous insider trading articles, the recent spike in insider selling at Linear Technology Corporation (NASDAQ:LLTC) should not surprise the investment community. In late-July, Analog Devices Inc. (NASDAQ:ADI) agreed to buy its fellow chipmaker Linear Technology for around $14.8 billion, so there aren’t any strong reasons the target’s executives would want to hold onto their ownership stakes any more. Under the terms of the agreement reached this summer, Linear Technology’s shareholders are set to receive $46 per share in cash and 0.2321 shares of Analog Devices should the deal go through. Magnetar Capital, run by Alex Litowitz and Ross Laser, initiated a 1.85 million-share position in Linear Technology Corporation (NASDAQ:LLTC) during the three-month period ended September 30.

CEO of Shopping Center REIT Sells Shares Ahead of Anticipated December Rate Hike

The man at the helm of Kite Realty Group Trust (NYSE:KRG) also unloaded a great deal of shares last week. Chairman and CEO John A. Kite sold 33,000 units of common stock on Tuesday at $24.35 apiece. After the recent sale, Mr. Kite currently holds an ownership stake of 86,001 units of common stock.

The vertically-integrated real estate investment trust focused on the development, ownership and operation of neighborhood and community shopping centers has seen the value of its shares fall by 6% since the start of the year. At the end of September, Kite Realty Group Trust (NYSE:KRG) owned interests in a portfolio of 121 operating, development and redevelopment properties, totaling around 24 million total square feet across 20 states. Earlier this month, the REIT’s Board of Trustees declared a quarterly cash distribution of $0.3025 per share, which marked an increase of 5.2% relative to the most recently-paid dividend. There were nine hedge funds within our system invested in the shopping center REIT at the end of the third quarter, compared to 13 funds invested at the end of June. Ken Griffin’s Citadel Advisors owned 174,280 shares of Kite Realty Group Trust (NYSE:KRG) at the end of September.

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