Executive at Media and Entertainment Company Sells Stock after Share Price Surges, Plus Other Interesting Insider Transactions

In today’s modern environment, investors have access to a wide array of tools designed to assist them with security analysis and investment decisions. One such tool is the evaluation of insider trading patterns, and some hedge funds do incorporate this kind of information into their security analysis process. While we are solely discussing the legal kind of insider trading, fresh reports suggest that the practice of crooked workers selling their firms’ secrets has been thriving recently.

More worryingly, there has been an increase in so-called “dark web” sites dedicated to white collar crime, making the aforementioned practice easier than ever as more insiders leak confidential information. Why, after years of news of shameful insider trading scandals, are new fraudsters entering the “dark” game of insider trading? A simple answer would be: illegal insider trading is insanely profitable. According to researcher Kenneth R. Ahern, unscrupulous investors reap an average gain of 101% in just nine trading days based on insider information related to clinical trials for instance. Let’s forget about the trades made by unscrupulous people who attempt to exploit and benefit from non-public information and focus on legitimate transactions made by corporate insiders instead. The following article discusses a set of legitimate insider transactions reported with the SEC on Wednesday.

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Insiders at Battered Sporting Goods and Guns ‘n’ Ammo Firm Purchase Shares

To start with, let’s analyze the cluster of insider buying observed at Vista Outdoor Inc. (NYSE:VSTO), where three corporate insiders purchased shares at the beginning of the week. Chairman and CEO Mark W. DeYoung bought 20,000 shares on Monday at prices varying from $20.77 to $20.81 per share, a purchase that lifted his ownership stake to 408,213 shares. A total of 4,500 shares were snapped by Robert J. Keller, President of the Shooting Sports segment, on Monday at $21.50 apiece. Mr. Keller currently owns an aggregate of 7,458 shares after the purchase. Board member Robert M. Tarola purchased 5,000 shares on Tuesday for $20.79 each, boosting his overall holding to 14,335 shares.

The shares of the designer, manufacturer and marketer of outdoor sports and recreation products have plunged by 44% thus far in 2017. On January 12, Vista Outdoor Inc. (NYSE:VSTO)’s shares fell by over 21% after revealing expectations of a material asset impairment charge (i.e. around $400-to-$450 million) at its hunting and shooting accessories reporting unit in the third quarter of the 2017 fiscal year. The sporting goods and guns ‘n’ ammo firm pointed out that an acceleration in the softening of the retail environment and acceleration on its own promotional activity caused both revenue and gross margin declines. Vista Outdoor also recently released a disappointing quarterly report, which revealed a 5% decline in organic sales and a massive decline in gross profit margin. D.E. Shaw & Co. L.P., founded by David E. Shaw, reported ownership of 1.05 million shares of Vista Outdoor Inc. (NYSE:VSTO) in its latest 13F filing.

The second page of the insider trading article discusses fresh insider buying observed at two other companies.

Chairman of Ultralife’s Board Boosts Ownership Stake

An important member of Ultralife Corp. (NASDAQ:ULBI)’s boardroom also bought shares at the beginning of the week. Bradford T. Whitmore, Chairman of the company’s Board of Directors, snapped up 42,569 shares on Monday at prices varying from $5.10 to $5.20 per share and 6,069 shares on Tuesday at $5.45 apiece. These transactions lifted Mr. Whitmore’s direct ownership stake to 375,968 shares. The Chairman is also an indirect beneficial owner of 4.45 million shares, held by Sunray I LLC.

The provider of products and services ranging from power solutions to communications and electronics systems has seen the value of its shares advance by a mere 3% in the past 12 months. The transactions mentioned above come shortly after Ultralife Corp. (NASDAQ:ULBI) released its financial results for the entire 2016, which featured operating income of $3.8 million on revenue of $82.5 million. This compares with operating income of $3.3 million on revenue of $76.4 million reported for 2015. Ultralife’s management plans to expand further beyond its core U.S. government/defense business by investing in market and sales reach expansion and new product development. Jim Simons’ Renaissance Technologies LLC held 125,400 shares of Ultralife Corp. (NASDAQ:ULBI) at the end of 2016.

Board Members at Struggling Multi-Channel Retailer Buy Shares

Two members of Lands’ End Inc. (NASDAQ:LE)’s Board of Directors added shares to their existing ownership stakes earlier this week. To begin with, Lands’ End Chairman Josephine Linden snatched up 10,804 shares on Monday and 3,700 shares on Tuesday at prices that fell between $16.65 and $17.65 per share. Ms. Linden currently owns an aggregate of 27,504 shares following these purchases. Board member John T. McClain bought 754 shares on Monday at $17.17 apiece, shares held in his defined benefit plan. Mr. McClain also holds a direct ownership stake of a mere 100 shares.

The multi-channel retailer of clothing, accessories and footwear has seen its market cap drop by 21% in the past year. In mid-December, Lands’ End Inc. (NASDAQ:LE) named Jerome Griffith, most recently the man in charge of high-end luggage market Tumi Holdings, as New CEO. The change in the corner office came a few months after former Dolce & Gabbana and Ferrari executive Federica Marchionni stepped down from her role as CEO after less than two years on the job. The company’s sales had embarked on a downtrend prior to Ms. Marchionni becoming CEO, with the top-line figure falling for seven consecutive quarters under her leadership. The company’s net revenue for the fourth quarter that ended January 27 is anticipated to fall by 3% year-on-year from $473.5 million in the fourth quarter of fiscal 2015. Mario Gabelli’s GAMCO Investors owns 27,700 shares of Lands’ End Inc. (NASDAQ:LE) as of December 31.

Let’s head to the final page of the article, where we discuss fresh insider selling at two other companies.

Member of Tyler Technologies’ Board Sells Shares – Routine Insider Selling?

There has been a huge volume of insider selling at Tyler Technologies Inc. (NYSE:TYL) in the past several weeks, though most selling was related to freshly-exercised stock options. Board member Larry D. Leinweber offloaded 18,720 shares on Monday for $156.42 each, 12,179 shares on Tuesday at $155.32 apiece, and 39,248 shares on Wednesday for $155.66 each. Mr. Leinweber, founder and former CEO of New World Systems – acquired by Tyler Technologies for $670 million in cash and stock back in 2015, currently owns an indirect ownership stake of 1.83 million shares through various trusts (mainly the Larry D. Leinweber Trust, which owns 1.14 million shares) following the transactions mentioned above.

While I would be inclined to view these transactions as routine (since Mr. Leinweber received his shares when the company he founded was acquired by Tyler in 2015), the timing of the sale could suggest that this is an opportune time for long-serving employees to diversify and sell some shares. The provider of end-to-end information management solutions and services for local governments has seen the value of its shares advance by 9% this year, an increase triggered by the release of the company’s fourth quarter results. Tyler Technologies Inc. (NYSE:TYL) reported total revenues of $193.3 million, which increased by 21.6% year-on-year. The organic growth reached 12.1%. Lou Simpson’s SQ Advisors added a 700,149-share position in Tyler Technologies Inc. (NYSE:TYL) to its portfolio during the fourth quarter.

Executive at Media and Entertainment Company Sells More than $2 Million Worth of Stock after Share Price Surges

One member of World Wrestling Entertainment Inc. (NYSE:WWE)’s executive team offloaded a huge portion of his stake at the beginning of the week. Kevin Dunn, Executive Vice President of Television Production, liquidated 100,908 class A shares on Tuesday at prices between $22.42 and $23.05 per share. Mr. Dunn owns a total of 529,620 shares after the sizeable sale.

The shares of the integrated media and entertainment company surged earlier this month after posting a stunning revenue beat with the release of the fourth-quarter and full-year earnings report. World Wrestling Entertainment Inc. (NYSE:WWE), which entertains the public via live and pay-per-view events and reality TV shows, reported $194.9 million in net operating revenue for the fourth quarter, a 17.3% increase compared to the same quarter of the previous year. In a similar vein, the company reported net income of $8.0 million, as compared to a net loss of $1.2 million posted a year ago. WWE shares have gained 46% in the past 12 months, thanks to a gain of 22% in 2017 alone. Ricky Sandler’s Eminence Capital reported owning 3.47 million shares of World Wrestling Entertainment Inc. (NYSE:WWE) through the latest round of 13F filings.

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