Co-Founder of Well-Known Creative Software Maker Offloads Shares, Retired CEO of Industrial-Product Maker Sells Shares, Plus Other Insider Trading

Corporate insiders have two means of buying and selling shares of their companies. The first option involves conducting transactions in the open market through a broker like any other retail investor does. The second option involves selling or buying shares on a systematic basis through pre-arranged trading plans, referred to as 10b5-1 plans.

Investors are well aware that executives and Board members sell shares for a wide range of reasons that may not be related to their company’s current developments or future outlook. These 10b5-1 plans enable insiders to complete some diversification without facing the prospect of insider trading liability, simultaneously avoiding intensifying worries among investors with regard to the insider selling. As Insider Monkey attempts to find information-rich trades only, our team ignores all insider transactions made under pre-arranged trading plans. It is nearly impossible to find out which insider sales are conducted because insiders anticipate bad times ahead, but one can at least get rid of those insider transactions deemed to be useless for certain. Having this in mind, the following article will mostly discuss a set of noteworthy insider selling observed at four companies, as well as some mild insider buying at one company.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Board Member of Mobile Content Provider Buys Shares

One important member of Zedge Inc. (NYSEMKT:ZDGE)’s Board of Directors has been purchasing more shares in the past several trading sessions. Howard S. Jonas, the Vice Chairman of Zedge’s boardroom since mid-November 2016, snapped up 6,382 Class B shares on Thursday at $3.23 apiece, 6,200 Class B shares for $3.17 each on Wednesday, as well as 5,900 units at $3.09 apiece on Tuesday. Following this series of transactions, Mr. Jonas currently owns an aggregate of 189,680 Class B shares.

Zedge Inc. (NYSEMKT:ZDGE), which provides a content platform that enables consumers to personalize their mobile devices with free ringtones, wallpapers, home screen app icons and notification sounds, has seen the value of its shares decrease by 29% in the past six months. The mobile content provider was spun-off by IDT Corporation (NYSE:IDT) in early June and became an independent public company. Unlike other phone customization providers, Zedge is predominantly advertising supported with most revenue coming from direct advertising in the company’s app. The company’s revenues for the three months that ended October 31 decreased to $2.38 million from $2.56 million, mainly reflecting a 10.7% decrease in the average revenue per monthly active user due to the company’s app being temporarily removed from the iTunes Store in late January 2016. Jim Simons’ Renaissance Technologies LLC held roughly 273,000 shares of Zedge Inc. (NYSEMKT:ZDGE) at the end of September.

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

Co-Founder of Well-Known Creative Software Maker Offloads Shares

An influential and well-informed member of Adobe Systems Incorporated (NASDAQ:ADBE)’s boardroom offloaded a sizeable block of shares earlier this year. Charles M. Geschke, co-founder and co-Chairman of the graphics and publishing software company, discarded 48,100 shares on Wednesday at prices ranging from $103.87 to $104.31 per share, all of which were held by the Geschke Family Trust. Mr. Geschke currently holds a stake of 251,873 shares through the trust mentioned above.

The shares of the maker of software used to design, publish and market digital content have gained 18% in the past 12 months. Just recently, financial services provider BMO Capital Markets initiated coverage on Adobe Systems Incorporated (NASDAQ:ADBE) with an ‘Outperform’ rating and a price target of $125. “The growth of Creative Cloud, Marketing Cloud margin expansion and operating expense leverage create upside tension to operating margins and our EPS estimates,” wrote BMO Capital analysts in a recent research note. More importantly, BMO analysts believe the creative software maker’s “gross margin expansion, scale, cross sell opportunities, and high renewal rates will continue to drive operating leverage.” Stephen Mandel’s Lone Pine Capital had 4.62 million shares of Adobe Systems Incorporated (NASDAQ:ADBE) in its portfolio at the end of the third quarter.

Retired CEO of Industrial-Product Maker Sells Shares

A member of Actuant Corporation (NYSE:ATU)’s Board of Directors offloaded a great deal of shares earlier this week. Board member Robert C. Arzbaecher, retired Chairman and CEO of the company, sold a total of 179,265 Class A shares on Tuesday at prices ranging from $25.95 to $26.75 per share, cutting his direct ownership stake to 315,000 shares. Mr. Arzbaecher, who doesn’t plan to stand for re-election as a director at the company’s upcoming annual shareholders’ meeting in mid-January, also reported the sale of the 2,200-share stake owned by his daughter and the stake of 2,400 shares owned by his spouse.

The shares of the industrial-product maker have gained 15% in the past 12 months, with some analysts anticipating the stock to reach even higher levels. Just recently, analysts at Aegis Capital reiterated their ‘Buy’ rating on Actuant Corporation (NYSE:ATU), arguing that the company’s results for the first quarter that ended November 30 showed further signs of stabilization in key end-markets. The much-anticipated industrial recovery in the United States should also boost the company’s results, with Aegis Capital’s analysts expecting an inflection in sales at Actuant’s most profitable industrial segment later this fiscal year. The brokerage has a price target of $30 on Actuant’s stock. The number of asset managers from our system with equity stakes in the industrial-product marker jumped to 16 from nine during the third quarter. Mason Hawkins’ Southeastern Asset Management reported owning 6.41 million shares of Actuant Corporation (NYSE:ATU) in its last 13F filing.

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

Executive at Multifamily REIT Sells Shares Despite Stock Underperformance

One member of UDR Inc. (NYSE:UDR)’s executive team discarded shares earlier this week. Warren L. Troupe, Senior Executive Vice President, liquidated 15,000 shares on Tuesday at prices varying from $36.00 to $36.69 per share, a sale that trimmed his ownership to 538,422 shares.

UDR Inc. (NYSE:UDR) operates as a self-administered real estate investment trust that owns, acquires, renovates, develops, and manages apartment communities. At the end of September, the REIT’s real estate portfolio included 132 communities located in 10 states and the District of Columbia with a total of 40,728 apartment homes. The multifamily REIT’s boardroom recently approved a cash dividend of $0.295 per share for the fourth quarter, which yields 3.24% annually. The shares of UDR are down a little less than 1% for the past 12 months. David Harding’s Winton Capital Management reported ownership of 212,390 shares of UDR Inc. (NYSE:UDR) in its 13F for the September quarter.

Executive at Heico Discards Massive Amount of Shares

One executive at Heico Corp (NYSE:HEI) also discarded a large amount of shares this week. Thomas S. Irwin, Senior Executive Vice President, liquidated 10,682 Class A shares on Tuesday and 14,318 Class A shares on Wednesday at a weighted average price of $67.87 per share, cutting his ownership of Class A shares to 56,888 shares. Mr. Irwin also offloaded 17,878 units of common stock on Tuesday and 7,122 units on Wednesday at an average price of $78.21 per unit, trimming his holding to 23,739 units. Heico has two classes of common stock, with the two classes being virtually the same, save for voting rights: Heico Class A common stock carries one-tenth of a vote and Heico common stock carries one vote.

Heico Corp (NYSE:HEI), whose business operations involve designing, manufacturing and distributing niche aviation, defense, space, medical, telecommunication and electronics products, has seen its market cap rise by 39% in the past year. The company’s net sales for fiscal year that ended October 31 totaled $1.38 billion, up 16% year-over-year. Furthermore, Heico’s management anticipates full-year net sales to grow in the range of 5% to 7% for the current fiscal year. Ken Fisher’s Fisher Asset Management owned 1.02 million common shares of Heico Corp (NYSE:HEI) at the end of September.

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