Have a Look at Three Companies with Fresh Noteworthy Insider Selling; Leading Title Insurance Provider Among Them

It is often believed that insider selling represents a tip-off that corporate insiders anticipate their company’s stock to underperform. However, mild or even heavy insider selling does not necessarily mean that a stock is destined to collapse. At the end of the day, the well-known saying that insiders sell shares for a wide array of reasons holds a grain of truth.

Corporate insiders, namely executives and Board members, usually sell shares for reasons ranging from expiring stock options to financial planning, with most insiders selling shares for personal financial reasons unrelated to possible bad times ahead for their companies. Insider Monkey tries to strip away ‘insignificant’ or ‘routine’ insider selling by ignoring insider transactions conducted under pre-arranged trading plans, which are usually associated with financial planning on the part of insiders, or transactions related to freshly-exercised stock options. The spur-of-the-moment insider selling analyzed by our team should not necessarily be interpreted as conveying bearish information either, as insiders can still sell shares spontaneously for personal needs without taking into consideration firm-specific developments and prospects. That said, the following article will lay out a list of spontaneous insider selling recently observed at three U.S. publicly-traded companies.

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Information and Analytics Provider Registers Insider Selling amid Ongoing Merger Process

The insider buying activity at IHS Inc. (NYSE:IHS) has been mute in recent years, whereas insider selling has been gaining steam lately. Vice Chairman Daniel Yergin, a Pulitzer-Prize winning author, discarded 12,445 Class A shares on Wednesday at prices ranging from $114.38 to $115.46 per share, trimming his ownership to 81,784 shares. Dr. Yergin also holds an indirect ownership stake of 12,000 Class A shares, held through an irrevocable trust.

In late March, the U.S. information and analytics provider inked an all-stock merger agreement with a U.K-based market-data company called Markit Ltd. to create a $13 billion London-based data and business research provider. The new company, to be called IHS Markit Ltd., is anticipated to pay a corporate tax rate in the low-to-mid 20% range, whereas U.S. companies pay a much higher rate of 35%. The shareholders of Colorado-based IHS Inc. (NYSE:IHS), whose businesses include Jane’s Defence Weekly and technology industry research firm iSuppli, will own approximately 57% of the combined company at closing. The multi-billion-dollar deal is anticipated to complete in the second half of 2016, with IHS shareholders receiving 3.5566 common shares of Markit for each share of IHS Class A shares owned. The soon-to-be-merged companies identified cost savings of $125 million, as well as revenue opportunities of $100 million that can be achieved by 2019.

There were 20 hedge funds tracked by Insider Monkey with long positions in IHS at the end of the first quarter, as compared to 16 registered at the end of the fourth quarter of 2015. John Griffin’s Blue Ridge Capital was the owner of 1.95 million shares of IHS Inc. (NYSE:IHS) at the end of March.

The next page of this insider trading article will discuss the recent insider selling registered at two other companies.

Leading Title Insurance Provider Witnesses Increased Insider Selling

The insider selling activity at FNF Group of Fidelity National Financial Inc. (NYSE:FNF) has been intensifying in recent months and weeks, so let’s have a look at the most recent insider selling. President Michael Joseph Nolan discarded one block of 6,894 shares and another one of 13,106 shares on Tuesday at prices varying from $36.71 to $37.02 per share, cutting his direct ownership stake to 69,143 shares. Mr. Nolan also holds an indirect ownership stake of 26,221 shares, which is held by a trust fund called Michael J. Nolan Trust.

The largest title insurance provider in the United States has seen its market value jump by 6% since the start of 2016. Black Knight Financial Services, a majority-owned subsidiary of FNF Group of Fidelity National Financial Inc. (NYSE:FNF) operating a leading residential mortgage servicing technology platform in the U.S., recently acquired provider of customized mortgage business intelligence analytics Motivity Solutions. The freshly-acquired company was one of the fastest-growing companies in the U.S. in 2012, according to some rankings. FNF’s total revenues for the first three months of 2016 decreased by $13 million year-over-year to $2.05 billion.

The hedge fund sentiment towards FNF increased during the first quarter of 2016, as the number of funds from our system invested in the company jumped to 44 from 40 quarter-on-quarter. Those 44 asset managers amassed nearly 14% of FNF’s total number of outstanding shares. Keith Meister’s Corvex Capital had 19.13 million shares of FNF Group of Fidelity National Financial Inc. (NYSE:FNF) among its holdings at the end of the March quarter.

Online Re-marketer of Vehicles Sees Freshly-Resigned Executive Sell Some Shares

Copart Inc. (NASDAQ:CPRT) has seen one of its executives sell shares heavily over the past several weeks. Paul A. Styer, General Counsel since September 1992 and Senior Vice President since April 1995, sold 7,640 shares on Tuesday at a price tag of $49.26 each, all of which were held in a trust fund called Styer Revocable Trust. After the recent sale, Mr. Styer currently holds an indirect ownership stake of 70,718 shares. In early June, Mr. Styer notified Copart that he will resign as Senior Vice President, General Counsel, and Secretary on the last day of July, so the recent insider selling should not worry investors.

The provider of online auctions and vehicle remarketing services has seen the value of its stock gain an impressive 29% since the beginning of 2016. Copart Inc. (NASDAQ:CPRT), which earlier this year reveled plans to open 15 new locations over the next year, recently announced the expansion of its location in Orlando. The leading online re-marketer of vehicles reported total service revenues and vehicle sales of $347.25 million for the three months that ended April 30, up a whopping 16.9% year-over-year. The increase was mainly attributable to increased volume and an increase in revenue per care due to a change in the mix of vehicles sold.

Copart fell out of favor with the hedge funds followed by Insider Monkey during the first three months of 2016, as the number of funds invested in the company dropped to 23 from 33 quarter-over-quarter. Those 23 asset managers hoarded up almost 6% of the company’s outstanding shares. Jeffrey Gates’ Gates Capital Management added a 370,540-share position in Copart Inc. (NASDAQ:CPRT) to its portfolio during the March quarter.

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