Heavy Insider Selling at Invesco Ltd. (IVZ) and Las Vegas Sands Corp. (LVS), Plus Insider Buying at 3 Other Companies

A vast number of studies completed by reputable researchers and professors from top-tier universities have arrived at the conclusion that corporate insiders tend to earn abnormal returns when buying shares of their companies. Similarly, another group of research papers concluded that non-insiders can also achieve strong returns by solely mimicking insiders, suggesting that investors could achieve better returns by incorporating insider trading activity into their stock selection and analysis process.

While some studies may be viewed as outdated and irrelevant, the reasoning behind tracking insider trading activity remains as strong and durable today as ever. As well-known investment guru Peter Lynch once said: “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.” Indeed, this line of thought still applies today, since it’s hard to believe that insiders are investing their hard-earned money in their own company’s shares for reasons other than that they anticipate capital gains. For that reason, this article predominantly discusses fresh insider buying recently observed at several companies, as well as covering some noteworthy insider sales transactions reported with the SEC on Tuesday.

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Long-Serving Board Member at Energy-Services Holding Company Initiates Stake

Let’s kick off our discussion by looking into the insider buying activity observed at Sempra Energy (NYSE:SRE). Alan L. Boeckmann, elected to the company’s Board of Directors in late-February 2011, initiated a stake of 6,000 shares on Tuesday at prices ranging from $101.73 to $101.92 per share. Clearly, the size of the purchase is not overly significant, but the timing of the purchase may be very informative. After all, the Board member could have initiated a stake at any time since early-2011, but did so only this week.

Just recently, the energy-services holding company that develops and operates energy infrastructure, and provides gas and electricity services to its customers in North and South America said it ended talks to buy control of Brazilian engineering company Odebrecht’s pipeline project in Peru. Sempra Energy (NYSE:SRE) said the Peruvian government could not offer guarantees that it would not cancel the pipeline contract if Odebrecht, a family-owned engineering conglomerate that controls 55% of the project, was found to have broken the law. Odebrecht has been in the center of the biggest graft scandals in Brazil, with the Peruvian prosecutors investigating possible wrongdoing in the awarding of the pipeline contract that Odebrecht won in a public auction in 2014. The shares of Sempra Energy are up by 7% thus far in 2016 despite having lost 5% in the past six months. Adage Capital Management, founded by Phillip Gross and Robert Atchinson, was the owner of 1.73 million shares of Sempra Energy (NYSE:SRE) at the end of the third quarter.

The next two pages of this daily insider trading article will discuss the fresh insider buying and selling activity observed at several other companies.

CEO of Large Owner of Oil and Natural Gas Mineral Interests Boosts Ownership Stake

The man at the helm of Black Stone Minerals LP (NYSE:BSM) boosted his holding at the beginning of the week. Chairman, CEO and President Thomas L. Carter Jr. snapped up 13,000 shares on Monday at prices varying from $18.81 to $19.07 per share, a purchase that lifted his direct ownership stake to 515,506 shares.

Black Stone Minerals LP (NYSE:BSM), one of the largest owners of oil and natural gas mineral interests in the continental United States, has seen the value of its shares increase by 27% this year. The company’s total revenue for the first three quarters of 2016 was $204.12 million, down from $292.88 million recorded for the same period of the previous year. The decrease in Black Stone’s top-line mainly reflected a $69.7 million difference in the impact of commodity derivative instruments and the effect of lower realized commodity prices, which was partially offset by a $10.1 million higher lease bonus and a $20.8 million increase from higher production volumes. Jim Simons’ Renaissance Technologies had 325,700 shares of Black Stone Minerals LP (NYSE:BSM) in its pool of holdings at the end of the September quarter.

Executive at Battered Healthcare IT Company Piles Up Shares

One member of Computer Programs & Systems Inc. (NASDAQ:CPSI)’s executive team bought more shares of his company this week as well. Robert D. Hinckle, Senior Vice President of Client Services since January 2013, purchased 4,000 shares on Monday at a weighted average price of $25.09 per share. After the recent purchase, Mr. Hinckle currently owns an aggregate of 17,000 shares.

The provider of healthcare information technology (IT) solutions and services for rural and community hospitals and post-acute care facilities has lost 50% of its market value since the start of the year. In early-January, Computer Programs & Systems Inc. (NASDAQ:CPSI) completed the acquisition of Healthland Holding Inc. and its wholly-owned subsidiaries Healthland, AHT and Rycan, which represented the first major acquisition in its history. Nonetheless, the acquisition weakened the acquirer’s balance sheet quite significantly, which could put Computer Programs & Systems at a disadvantage to deeper-pocketed competitors. There were seven hedge funds tracked in our system with long positions in the healthcare IT company on September 30, down from 13 funds at the end of June, so several hedge funds have seemingly soured on the company. Ken Griffin’s Citadel Advisors reported ownership of around 191,000 shares of Computer Programs & Systems Inc. (NASDAQ:CPSI) through the latest round of 13F filings.

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

Top Executive at Strong-Performing Casino Operator Discards Shares

A high-ranked executive at Las Vegas Sands Corp. (NYSE:LVS) offloaded two sizable blocks of shares over the past several trading sessions. President and Chief Operating Officer Robert G. Goldstein discarded 50,000 shares on Friday and 119,111 shares on Monday at prices that fell between $62.53 and $63.27 per share, all of which were held indirectly by the Robert and Sheryl Goldstein Trust. Following the recent sales, Mr. Goldstein currently holds an indirect ownership stake of 127,057 shares through the trust fund mentioned above.

According to Stifel analysts, Las Vegas Sands Corp. (NYSE:LVS) might be the best-positioned casino-hotel operator in Macau. “Although LVS shares have ridden the wave of improved Macau market fundamentals over the past several months, we continue to see considerable upside in the name from here,” said Stifel analysts in a recent note. The shares of the casino operator have gained 41% so far this year, which possibly explains the insider selling discussed above. Stifel analysts also added that “our bullish outlook is supported by the company’s 3Q16 results, which in our view clearly portray LVS as the most dominant player in today’s Macau.” Iridian Asset Management, founded by David Cohen and Harold Levy, added a 3.86 million-share position in Las Vegas Sands Corp. (NYSE:LVS) to its portfolio during the three-month period ended September 30.

More Insider Selling at Well-Known Investment Management Firm

After a senior managing director at Invesco Ltd. (NYSE:IVZ) offloaded 150,000 shares earlier this month, another senior managing director at the investment management firm discarded a sizable block of shares this week. Philip Alexander Taylor, the head of Americas since 2012 and Senior Managing Director, liquidated 140,000 shares on Monday at prices that ranged from $31.22 to $31.44 per share. After the recent sale, Mr. Taylor currently owns a total of 147,751 shares.

Invesco Ltd. (NYSE:IVZ) has been enjoying strong capital inflows lately despite facing strong competition from low-cost exchange-traded funds and other passive vehicles. The asset manager reported net long-term inflows of $12.2 billion for the third quarter, reflecting net inflows of $8.3 billion into its actively managed funds and $3.9 billion into its passive products. According to Morningstar, more than $25 billion flowed into U.S. equity exchange-traded funds in the first full week following the election, a favorable outcome for players such as BlackRock Inc. (NYSE:BLK) and Invesco. The shares of Invesco are 7% in the red this year. Cliff Asness’ AQR Capital Management was the owner of 1.16 million shares of Invesco Ltd. (NYSE:IVZ) at the end of September.

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