Fresh Insider Selling at PPG Industries Inc. (PPG), Atmel Corporation (ATML), and Pinnacle Foods Inc. (PF)

All major U.S stock indexes posted big gains on Tuesday, after fresh data alleviated worries and concerns about the strength of the U.S economy. The freshly-revealed data suggests that market conditions in the real world are not as unhealthy as most investors and analysts previously anticipated. The surge in insider buying activity coupled with a substantial decline in insider selling throughout January and February were shouting just that; that the U.S economy was not as weak as market participants seemed to believe, based on the market’s bear run during the first two months of the year, so broader shifts in insider trading behavior may be very informative on some occasions. Corporate insiders tend to act as contrarian investors, which means that they buy shares when nobody wants them and sell shares when everyone wants them. Although it is true that some insider sales may not be indicative of possible poor stock performance, investors should keep a close eye on this type of activity as well, three examples of which we’ll look at in this article.

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Let’s kick off our investigation by analyzing the recent insider selling activity at PPG Industries Inc. (NYSE:PPG), which saw its top executive sell a sizable block of shares last week. Chairman and Chief Executive Officer Charles E. Bunch unloaded 46,286 shares on Friday at prices that ranged from $97.90 to $98.43 per share, trimming his direct ownership stake to 732,911 shares. The Executive Chairman also holds an indirect ownership stake of 24,175 shares, which is held through his 401(k) plan.

The shares of the manufacturer of coatings, specialty materials and glass products are down by 15% over the past 12 months, though they are trading in positive territory year-to-date. Earlier this week, aftermarket auto parts supplier LKQ Corporation (NASDAQ:LKQ) announced an agreement to purchase Pittsburgh Glass Works LLC from PPG and private equity firm Kohlberg & Co. LLC. PPG Industries Inc. (NYSE:PPG) has approximately 40% ownership interest in Pittsburgh Glass Works, with the freshly-inked deal completing PPG’s transition away from the automotive glass industry. Instead, PPG plans on strengthening its market position in paint, coatings and specialty materials. The $635 million-deal is anticipated to close in the second quarter of 2016.

PPG Industries generated net sales of $15.33 billion in 2015, down from $15.36 billion generated in 2014. The decrease was mainly attributable to foreign currency headwinds, which were in turn offset by new sales from acquired businesses and higher volumes. PPG is known as a dividend aristocrat, as it has increased its annual dividend payments for 43 consecutive years. The company pays out an annual dividend of $4.29 per share, which denotes a current dividend yield of 1.49%. Meanwhile, the stock is currently trading at 14.39-times expected fiscal year 2017 earnings, below the forward P/E ratio of 18.90 for the Specialty Chemicals industry. The number of hedge funds in our system with stakes in PPG dropped to 43 from 51 during the fourth quarter of 2015. Ken Griffin’s Citadel Advisors LLC owns 3.17 million shares of PPG Industries Inc. (NYSE:PPG) as of December 31.

The second page of this article reveals the recent insider selling registered at Atmel Corporation (NASDAQ:ATML) and Pinnacle Foods Inc. (NYSE:PF).

Atmel Corporation (NASDAQ:ATML) registered a notable cluster of insider selling in the past two weeks, as three different insiders unloaded shares recently. To start with, Senior Vice President and Chief Legal Officer Scott M. Wornow sold 225,000 shares on Monday at a weighted average price of $8.09, thus trimming his stake to 356,336 shares. Director Papken S. der Torossian discarded 10,000 units of common stock on Thursday at a weighted average price of $8.09, all of which were held through a trust fund that currently owns 69,201 shares. The Director also holds a direct ownership stake of 128,006 shares. Robert E. Valiton Jr., Senior Vice President and General Manager of Automotive, Aerospace and Memory Business Units, offloaded 338,843 shares last Monday at an average price of $8.06. The SVP also sold 59,999 freshly-vested stock options. After these recent transactions, the SVP continues to own 470,842 shares.

Earlier this year, the supplier of general purpose microcontrollers announced the termination of its previously-announced merger agreement with Dialog Semiconductor PLC, which was replaced with a freshly-signed deal with Microchip Technology Inc. (NASDAQ:MCHP). Microchip’s bid, which values Atmel’s stock at $8.15 per share, surpassed the cash-and-stock offer received from Dialog Semiconductor. As a result, Atmel Corporation paid a termination fee of $137.3 million to Dialog. Under the terms of the new deal, each shareholder of Atmel will receive $7.00 in cash and $1.15-worth of Microchip stock, which amounts to about 2.5% of one Microchip share at the present time. Considering that the discrepancy between the current price of Atmel’s stock and the aforementioned offer is minimal, it is not surprising to see some insiders trimming their holdings. Matthew Mark’s Jet Capital Investors acquired a new stake of 6.60 million shares of Atmel Corporation (NASDAQ:ATML) during the December quarter.

Pinnacle Foods Inc. (NYSE:PF) had one of its executives jettison a sizable block of shares this week. Executive Vice President and Chief Financial Officer Craig D. Steeneck sold 40,000 shares on Monday at prices varying from $43.20 to $43.36 per share. Following the recent sale, the CFO owns a stake of 197,697 shares.

The stock of the manufacturer and marketer of branded food products has advanced by nearly 20% over the past 52 weeks. Pinnacle Foods generated net sales of $2.66 billion in fiscal year 2015 that ended December 27, which was up from $2.59 billion reported for the prior fiscal year. The increase in the top-line figure was achieved due to the acquisition of Gardein, a rapidly-growing manufacturer of plant-based protein, and higher net price realization. In January 2016, Pinnacle Foods completed the acquisition of Boulder Brands Inc., which manufactures a range of health and wellness brands such as Udi’s and Glutino gluten-free products, and EVOL natural frozen meal offerings, among others. The recent acquisition is expected to assist the company in delivering yet another year of exceptional growth. The management of Pinnacle Foods anticipates 2016 adjusted diluted earnings per share in the range of $2.08-to-$2.13 per share. The stock is priced at 18.45-times fiscal year 2017 earnings, below the forward P/E multiple of 21.00 for the Packaged Foods industry. It should be noted that Pinnacle Foods distributes its shareholders an annual dividend of $1.02 per share, which marks a current dividend yield of 2.32%. The hedge fund sentiment towards the stock was negative in the December quarter, as the number of funds tracked by Insider Monkey with stakes in the company plummeted to 27 from 37 quarter-over-quarter. Lee Ainslie’s Maverick Capital owns 4.85 million shares of Pinnacle Foods Inc. (NYSE:PF) as of the end of the fourth quarter.

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