Cluster of Insider Selling at Tucows Inc. (USA) (TCX), Plus Other Notable Insider Transactions

As the U.S. third-quarter earnings season is set to kick off in the upcoming days, the insider trading activity has shown signs of weakness in the past several trading sessions. Insider trading policies permit Board members and executives to buy and sell shares of their companies during specific trading windows. These trading windows are usually open for insiders after companies disclose their quarterly financial results and are closed before the end of each fiscal quarter. The presence of these trading windows explains the weakening insider trading activity observed recently.

After five consecutive quarters of earnings declines, investors will likely experience another “bad” quarter of earnings. The aggregate third-quarter earnings for the companies comprising the S&P 500 Index are anticipated to decline 2.1%. Assuming that the third-quarter earnings season will put weight on U.S. equities in the upcoming weeks, one might anticipate insider buying to revitalize as a result. By constructing a rolling purchase portfolio that holds shares purchased by insiders, one study finds that the portfolio earned abnormal returns of around 40 basis points per month. This study represents strong evidence that insider trading activity, particularly insider buying, is worth monitoring on a daily basis. That said, this article will discuss fresh insider buying and selling activity reported with the SEC on Friday.

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

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CEO of Provider of IT Services to U.S. Federal Government Agencies Purchases Shares

The man in charge of NCI Inc. (NASDAQ:NCIT) purchased some shares of his company this past week. President and Chief Executive Officer Brian J. Clark snatched up 3,000 shares on Thursday at a price tag of $11.10 per share. After the recent purchase, Mr. Clark currently owns 162,962 shares.

The provider of information technology (IT) and professional services and solutions to U.S. defense, intelligence, health care and civilian government agencies has seen the value of its shares plunge by 14% since the start of the year. NCI Inc. (NASDAQ:NCIT) recorded revenue of $81.90 million for the quarter that ended June 30, which marked a decrease of 4.5% year-over-year. The decrease in the company’s top line mainly reflects completed contracts, work that was set aside for small businesses, as well as reductions in staffing and scope of work on certain contracts. The number of hedge funds followed by Insider Monkey with long positions in NCI fell to three from five during the second quarter. Jim Simons’ Renaissance Technologies LLC owned around 420,000 shares of NCI Inc. (NASDAQ:NCIT) at the end of June.

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

Board Member at High-Flying Asure Software Buys Shares

One member of Asure Software Inc. (NASDAQ:ASUR)’s boardroom piled up some shares during the final trading session of September. Board member Matthey K. Behrent bought 5,625 shares on Friday for $2.33 each, lifting his overall holding to 21,189 shares.

The shares of the global provider of cloud-based software-as-a-service time and labor management and Agile Workplace management solutions are up 42% thus far in 2016. Asure Software Inc. (NASDAQ:ASUR)’s product offerings are categorized into AsureSpace – offers workplace management solutions – and AsureForce – offers time and labor management solutions. In March, the company acquired the payroll division of Mangrove Employer Services, an acquisition that enabled Asure Software to enter into the human resource management, payroll processing and benefits administration services businesses. The company reported revenue of $9.66 million for the three months that ended June 30, an increase of 35.0% year-on-year. Renaissance Technologies LLC had 255,476 shares of Asure Software Inc. (NASDAQ:ASUR) in its portfolio on June 30.

Executive Chairman of Athletic Retailer Unloads Shares

One of the most well-informed insiders at Finish Line Inc. (NASDAQ:FINL) offloaded a sizeable block of shares last week. Glenn S. Lyon, who will serve as Executive Chairman through the end of 2016 and then serve as Non-Executive Chairman, discarded 38,523 shares on Wednesday at $23.19 apiece. After the recent sale, Mr. Lyon currently holds an ownership stake of 192,088 shares.

The premium retailer of athletic shoes, apparel and accessories has seen its market cap jump by 29% since the start of the year. Just recently, analysts at Buckingham Research downgraded Finish Line Inc. (NASDAQ:FINL) to ‘Neutral’ from ‘Buy’ and reduced the price target on the stock to $23 from $25, saying that the firm’s stock will trade range-bound in the medium term due to high comparable sales expectations. The athletic retailer’s brick-and-mortar stores sales for the three months that ended August 27 were $332.29 million, down from $337.22 million recorded in the same period of the previous year. However, the company’s Finish Line sales, composed of brick-and-mortar sales and digital sales, grew 2.5% year-over-year. Steve Cohen’s Point72 Asset Management reported ownership of 104,800 shares of Finish Line Inc. (NASDAQ:FINL) in its 13F for the second quarter.

The final page of this article will discuss recent insider selling at two other companies.

Board Member of Ski-Resort Operator Offloads Shares

One member of Vail Resorts Inc. (NYSE:MTN)’s Board of Directors discarded a relatively voluminous amount of shares last week. Board member John F. Sorte liquidated 4,688 shares on Wednesday at a weighted average price of $155.94 per share. Following the Wednesday transactions, Mr. Sorte currently owns 58,759 shares.

Vail Resorts Inc. (NYSE:MTN)’s operations are predominantly focused on two business segments: Mountain and Lodging. The company’s Mountain segment operates nine mountain resort properties and three urban ski areas, while the Lodging segment owns and manages luxury hotels under the RockResorts brand, condominiums located in proximity to its mountain resorts, among others. The insider selling comes shortly after the ski-resort operator released somewhat disappointing financial results for its fiscal fourth quarter that ended July 31. Nonetheless, Vail Resorts said the number of season passes sold through September 18 for the upcoming U.S. ski season increased by around 24% in units and 29% in sales dollars versus the same period of the previous year. The shares of the ski-resort company are 24% in the green this year. Mason Hawkins’ Southeastern Asset Management was the owner of 1.07 million shares of Vail Resorts Inc. (NYSE:MTN) at the end of June.

Cluster of Insider Selling at Provider of Network Access and Domain Names

Three different insiders at Tucows Inc. (USA) (NASDAQ:TCX) offloaded shares last week. To start with, Carla A. Goertz, Executive Vice President of Human Resources, sold out her entire ownership stake of 20,708 shares on Thursday at prices that fell between $31.85 and $32.90 per share. Board member Jeffrey N. Schwartz sold 13,125 shares last Monday at prices ranging from $30.63 to $30.87 per share. Following the recent sale, Mr. Schwartz currently owns 30,625 shares. Last but not least, Allen Karp, Co-Chairman of the company’s Board of Directors, liquidated 5,000 shares on Thursday. Mr. Karp’s filing might need an amendment, as the sale prices of the freshly-sold shares do not seem realistic. The reported sale prices were between $41.70 and $41.95, well above the 52-week high of $33.94 reached last week.

The provider of network access, domain names and other Internet services has seen its market value rise by 51% since the beginning of the year. Tucows Inc. (USA) (NASDAQ:TCX)’s net revenues for the first half of 2016 rose by 12% year-over-year to $93.1 million. There were six asset managers from our system with equity stakes in Tucows at the end of the second quarter, which amassed 12% of the company’s total number of outstanding shares. John H. Lewis’ Osmium Partners owned 494,388 shares of Tucows Inc. (USA) (NASDAQ:TCX) at the end of June.

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