Fresh Insider Buying at Struggling ETF Specialist and Two Other Companies, Plus Noteworthy Insider Sales

Well-known arbitrageur Ivan Boesky founded his own arbitrage fund called Ivan Boesky and Company in 1975, which sought to generate money by buying shares of companies that were going to be acquired. After Mr. Boesky made hundreds of millions of dollars, regulators found out that the well-known arbitrageur was actually trading on illegal insider information. While most people associate the term “insider trading“ with individuals like Ivan Boesky, the investment community should make a clear distinction between the “legal” and “illegal” kind of insider trading.

The legal kind of insider trading relates to perfectly legal buying or selling of common stock by executives, Board members and major shareholders who own stakes above the 10%-threshold. Although monitoring the legal kind of insider transactions may not yield astonishing returns as the ones generated by Boesky’s fraudulent scheme, numerous studies have concluded that corporate insiders are indeed better informed than other stock market participants and earn abnormal returns of up to 30% on some occasions. Hence, the usage of insider trading metrics could enable retail investors to make sound and well-informed investment decisions that can generate market-beating returns. Without further ado, let’s have a look at a list of five companies that registered noteworthy insider transactions in the past several trading sessions.

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 Struggling ETF Specialist Buys Sizeable Block of Shares

To start with, the man in charge of WisdomTree Investments Inc. (NASDAQ:WETF) made a sizable purchase of common stock this week. President and Chief Executive Officer Jonathan Laurence Steinberg purchased 100,000 shares on Wednesday at prices ranging from $10.14 to $10.30 per share. After the purchase, Mr. Steinberg holds 7.48 million shares of the company.

The New York-based exchange traded product sponsor and asset manager has seen its market cap decline by 34% since the beginning of the year. WisdomTree Investments Inc. (NASDAQ:WETF) was the ninth-largest exchange traded product sponsor in the world based on assets under management at the end of June, with AUM of $39.0 billion. The company’s disappointing stock performance has been mainly driven by strong capital outflows from its currency-hedge foreign stock ETFs, namely WisdomTree Japan Hedged Equity Fund (DXJ) and the WisdomTree Europe Hedged Equity Fund (HEDJ). Royce & Associates, founded by Chuck Royce, trimmed its position in WisdomTree Investments Inc. (NASDAQ:WETF) by 45% during the June quarter to 1.21 million shares.

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

COO of Oil and Gas Company Piles Up Shares

One member of Panhandle Oil and Gas Inc. (NYSE:PHX)’s executive team also piled up some shares of company stock this week. Paul F. Blanchard Jr., Chief Operating Officer since January 2009 and Senior Vice President since March 2010, snapped up 23,316 class A shares on Tuesday through multiple transactions at an average price of $16.01 per share. After the recent set of transactions, Mr. Blanchard Jr. owns 218,400 class A shares of Panhandle, which include restricted shares with vesting based on performance criteria.

Panhandle Oil and Gas Inc. (NYSE:PHX) engages in the exploration for and production of natural gas and oil, with its oil and gas holdings, including its mineral acreage and its interests in producing wells, being centered in Arkansas, Oklahoma and Texas. The company recorded a net loss of $11.02 million for the nine months that ended June 30, as compared to net income of $10.21 million posted for the same period of the prior year. Meanwhile, Panhandle’s total revenues for the nine-month period that ended June 30 were $28.91 million, down massively from $57.43 million posted a year ago. Even so, the company’s cash flow from operations fully funded costs associated with drilling and equipping wells during these nine months. The shares of the oil and gas company are down 1% thus far in 2016. Douglas T. Granat’s Trigran Investments was the owner of 1.59 million shares of Panhandle Oil and Gas Inc. (NYSE:PHX) at the end of June.

Freshly-Appointed Board Member of Government Services Giant Purchases Shares

A member of Leidos Holdings Inc. (NYSE:LDOS)’s boardroom also completed a purchase of company stock earlier this week. Surya N. Mohapatra, appointed to serve on the 12-member Leidos board in mid-August, bought 3,575 shares on Tuesday at prices that fell in the range of $41.29 and $41.89 per share, lifting his overall holding to 6,143 shares.

In mid-August, the applied technology company that provides services and solutions to national security, health and infrastructure markets announced the completion of the previously-announced combination of Leidos with Lockheed Martin Corporation (NYSE:LMT)’s Information Systems & Global Solutions business via a Reverse Morris Trust transaction, which generally combines a tax-free spin-off with a pre-arranged merger. As federal agencies are putting pricing pressures on government service providers and simultaneously putting pressures on their margins, the freshly-created multi-billion-dollar government services giant enables Leidos to boost market share, enhance efficiencies and achieve cost synergies to tackle margin pressures. Ken Griffin’s Citadel Advisors LLC owned nearly 349,000 shares of Leidos Holdings Inc. (NYSE:LDOS) on June 30.

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

Board Member of Interactive Intelligence Group Sells Shares After Merger Announcement

One member of Interactive Intelligence Group Inc. (NASDAQ:ININ)’s Board of Directors offloaded some shares this past week. Mark E. Hill, Director since 2004, offered 17,000 shares as a bona fide gift to the Central Indiana Community Foundation last Wednesday, as well as sold 30,000 shares last Thursday in 108 transactions at prices ranging from $60.25 to $60.39 per share. After the aforementioned transactions, Mr. Hill currently owns 94,064 shares.

At the end of August, Interactive Intelligence Group Inc. (NASDAQ:ININ), a provider of software and cloud services for customer engagement, communication and collaboration, agreed to be acquired by call-center software company Genesys for around $1.4 billion. The privately-held contact center company seeks to build up scale amid intensifying competition in the telecommunications software and equipment industry. Under the terms of the freshly-inked agreement, Interactive Intelligence Group shareholders are set to receive $60.50 per share in cash at closing. As the shares of Interactive Intelligence Group are up an impressive 91% year-to-date, the Board member’s decision to unload shares is far from surprising. Brian Bares’ Bares Capital Management had 2.86 million shares of Interactive Intelligence Group Inc. (NASDAQ:ININ) in its portfolio at the end of June.

CFO of Infant and Juvenile Products Company Offloads Shares

A well-informed and influential member of Summer Infant Inc. (NASDAQ:SUMR)’s management team discarded some shares this week. William E. Mote Jr., Chief Financial Officer since November 2014, liquidated 3,000 shares for $2.10 each and 500 shares at $2.11 apiece on Monday, cutting his ownership to 33,500 shares.

As the premier infant and juvenile products company has lost 47% of its market value in the past two years, the CFO’s move might not suggest great prospects for the company ahead. Summer Infant Inc. (NASDAQ:SUMR)’s shares are down 8% year-to-date. The company reported net sales of $50.6 million for the three months that ended July 2, down from $51.8 million posted for the same period of the prior year. Summer Infant posted net income of $0.3 million for the three-month period that ended July 2, as compared to a net loss of $3.5 million reported last year. A mere two hedge funds followed by Insider Monkey were invested in Summer Infant at the end of the second quarter. Jim Simons’ Renaissance Technologies LLC reported ownership of 175,500 shares of Summer Infant Inc. (NASDAQ:SUMR) through the latest round of 13Fs.

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