Five Companies Register Noteworthy Insider Transactions

The profitability of insider trading has been studied in numerous studies over the past several decades, with most studies concluding that corporate insiders are better informed about their companies’ future prospects than market analysts, retailer investors or other stock market participants and trade profitably based on that “privileged” information.

Most of these studies point to significant abnormal returns for insiders’ purchases of securities, as well as conclude that purchases are more informative than sales. At the end of the day, there is a high number of reasons to sell shares, including liquidity needs or portfolio diversification, but the primary reason for buying shares is to make a profit. Past research also shows that Board members and executives are extremely good at timing their transactions, with their trading approach focusing on “buying low and selling high”. In fact, insiders’ contrarian approach to investing might actually explain their trading success. All in all, retail investors could find insider trading metrics very useful for the improvement of their stock selection and analysis processes. Without further ado, let’s discuss a set of noteworthy insider transactions reported with the SEC during the first trading day of this week.

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Board Member of Growing Provider of Whole Car Auction Services Buys Shares

To begin with, one member of KAR Auction Services Inc. (NYSE:KAR)’s Board of Directors increased his holding of KAR shares this past week. Board member Mark E. Hill purchased 12,000 shares on Friday at a cost of $41.78 per share, which lifted his overall holding to 25,500 shares.

Although the provider of whole car auction services and salvage auction services in North America and the United Kingdom has seen the value of its shares advance by 13% since the beginning of the year, Mr. Hill keeps boosting his ownership of KAR shares. KAR Auction Services Inc. (NYSE:KAR)’s revenue for the thee months ended June 30 was $771.8 million, up from $658.3 million posted a year ago. The increase in the company’s top line primarily reflects an increase in the number of vehicles sold, as well as an increase in revenue per vehicle sold. The number of used vehicles sold in North America through whole car auctions were around 8.7 million, 9.2 million and 9.8 million in 2013, 2014 and 2015, respectively. More importantly, KAR Auction Services anticipates used vehicle auction volumes in North America to exceed the 10 million units-threshold in 2016 and in each of the subsequent two years. Amy Minella’s Cardinal Capital was the owner of 1.99 million shares of KAR Auction Services Inc. (NYSE:KAR) at the end of the June quarter.

The next two pages of this insider trading article will reveal another set of noteworthy insider transactions reported with the SEC on Monday.

CEO and CFO of Advertising-Focused REIT Increase Holdings of Company Stock

Tow top-tier executives at Outfront Media Inc. (NYSE:OUT) have purchased shares of the company thus far this September. To start with, Chairman and Chief Executive Officer Jeremy J. Male snatched up 5,000 shares on Monday at prices varying from $21.37 to $21.39 per share. Following the recent purchase, Mr. Male currently holds an ownership stake of 204,297 shares. On September 6, Donald R. Shassian, Executive Vice President and Chief Financial Officer, bought 5,000 shares at a price tag of $21.90 each, which increased his overall ownership to 137,438 shares.

The real estate investment trust that provides advertising space on out-of-home advertising structures and sites in the United States and Canada has seen its market cap fall by 1% since the start of the year. Earlier this week, Outfront Media Inc. (NYSE:OUT) announced that it assumed the advertising rights for the 349 transit buses operated by the City of Los Angeles Department of Transportation and the 242 buses operated by Long Beach Transit. The REIT pays out a quarterly cash dividend of $0.34 per share, which yields an impressive 6.32% annually. Jim Simons’ Renaissance Technologies trimmed its position in Outfront Media Inc. (NYSE:OUT) by 57% during the April-to-June quarter to 747,700 shares.

Several Insiders at Satellite Communications Company Buys Shares Amid Stock Price Weakness

Two corporate insiders at Iridium Communications Inc. (NASDAQ:IRDM) also piled up more shares of common stock this past week. Chief Executive Officer Matthew J. Desch bought 15,000 shares on Friday at prices that fell between $6.94 and $6.99 per share, boosting his overall holding to 554,040 shares. Board member Barry J. West snapped up 10,000 shares two days earlier at prices ranging from $7.25 to $7.26 per share. After the not-so-distant purchase, Mr. West currently owns 20,856 shares.

The shares of the second-largest provider of satellite-based mobile voice and data communications services are down 12% since the beginning of 2016, primarily reflecting a drop of 14% in the past month alone. Iridium Communications Inc. (NASDAQ:IRDM) is currently in the process of replacing its satellite network, with investors being worried about possible disruptions from launch failures after a fresh high-profile explosion. There were 11 hedge funds from our system invested in the satellite communications company at the end of the second quarter. Royce & Associates, founded by Chuck Royce, was the owner of 1.46 million shares of Iridium Communications Inc. (NASDAQ:IRDM) on June 30.

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

Vice President of Commerce Bank Unloads Shares

A highly-informed insider at Commerce Bancshares Inc. (NASDAQ:CBSH) unloaded a relatively sizable block of company stock last week. Jonathan M. Kemper, Vice President of Commerce Bank, liquidated 50,000 shares on Thursday at sale prices that ranged from $50.00 to $50.24 per share. Following the recent sale, Mr. Kemper currently holds a direct ownership stake of 1.19 million shares.

The bank holding company for Commerce Bank has seen its market value jump by 17% so far in 2016. Commerce Bancshares Inc. (NASDAQ:CBSH)’s net income for the first two quarters of 2016 was $130.77 million, a slight decrease from $130.91 million posted for the same period a year ago. Meanwhile, diluted earnings per share increased to $1.35 from $1.30 per share posted a yea ago. There was a total number of six hedge funds invested in the bank at the end of the second quarter, as compared to eight recorded at the end of the previous quarter. Dmitry Balyasny’s Balyasny Asset Management reported owning 214,329 shares of Commerce Bancshares Inc. (NASDAQ:CBSH) in its 13F for the second quarter.

Board Member at Healthcare-Focused REIT Sells Shares

One corporate insider at Omega Healthcare Investors Inc. (NYSE:OHI) also offloaded a voluminous chunk of shares this past week. Craig M. Bernfield, Board member since April 2015, discarded 43,942 shares on Thursday at a price of $37.47 per share, cutting his ownership to 859,995 shares.

The shares of the real estate investment trust that invests in healthcare-related real estate properties located in the United States and the United Kingdom are 2% in the green thus far in 2016. Omega Healthcare Investors Inc. (NYSE:OHI)’s core business involves providing financing and capital to the long-term healthcare industry, with a particular emphasis on skilled nursing facilities. Omega Healthcare Investors is believed to be cheaper than most healthcare-focused REITs because of its focus on the skilled nursing sector. In mid July, the REIT’s boardroom approved a stock dividend of $0.60 per share, representing an increase of $0.02 per share over the previously-paid dividend. The increase dividend equates to a current annual dividend yield of 6.68%. Ken Griffin’s Citadel Advisors LLC owns around 628,000 shares of Omega Healthcare Investors Inc. (NYSE:OHI) as of the end of June.

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