Helicopter Services Company PHI Inc. (PHII), Strong-Performing Advanced Energy Industries Inc. (AEIS), and Struggling EVINE Live Inc. (EVLV) Saw Insiders Purchase Shares Last Week

With most companies and stock market participants getting ready for another harsh earnings season, insider trading activity, particularly on the buy side, has been slowing quite significantly in the past several weeks. Numerous companies have put in place various trading blackout periods, which restrict insiders from buying or selling shares ahead of earnings releases. Last week’s dollar volume of insider buying declined meaningfully relative to the previous week (even though the latter was a holiday-shortened week), whereas the volume of insider selling more than doubled week-over-week. As a result, last week’s ratio of insider selling over insider buying skyrocketed to levels not seen for quite a long period of time. This phenomenon should not surprise anyone, especially considering the grim outlook for the first-quarter earnings season. According to FactSet, the S&P 500 first-quarter earnings are anticipated to decline 8.5% year-on-year, which would mark the fourth straight quarter of year-on-year declines in earnings. It is true that the massive decline in earnings will be driven by the struggling energy sector, but other sectors such as the technology and financials sectors are not expected to deliver great earnings either (tech earnings are anticipated to decline by more than 5% and financials are expected to decline by more than 7%). Leaving this discussion aside, there still was some insider buying activity that could catch investors’ eyes last week. Insider Monkey processed most Form 4 filings submitted with the SEC on Friday and pinpointed three companies with noteworthy insider buying.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

Advanced Energy Industries Inc. (NASDAQ:AEIS) was one of the few companies that witnessed some insider buying this past week. Grant H. Beard, a member of the company’s Board of Directors, snapped up 10,000 shares on Wednesday at prices that ranged from $34.87 to $35.47 per share, lifting his ownership to 38,000 shares. Mr. Beard’s ownership stake also includes 18,000 shares received in two grants in the form restricted stock units (RSUs): 10,000 RSUs, which were granted in May 2014, vest annually in four equal installments on each anniversary of the grant date; and 8,000 RSUs, granted in May 2015, vest 100% at the anniversary of the grant date.

Advanced Energy Industries Inc. (NASDAQ:AEIS) is a provider of precision power conversion, measurement and control solutions to various customers. The company’s process power products enable manufacturing processes that use thin films for products such as semiconductor devices, flat panel displays, thin film renewables, industrial coatings and architectural glass, among others. The shares of Advanced Energy Industries have enjoyed a great run since the beginning of 2016, as they climbed 24% year-to-date. Although capital spending in the semiconductor equipment industry was practically flat year-on-year in 2015, the increased usage of mobility, connectivity and the cloud are expected to increase the demand for higher density memory, high speed logic devices and lower power consumption. Furthermore, more capital spending across the semiconductor industry is anticipated to be channeled towards next-generation technologies such as 3D devices and 3D packaging, which will result in higher demand for radio frequency (RF) power supplies and accessories. These trends in the semiconductor equipment industry may continue driving up the company’s growth in the years ahead. Advanced Energy Industries generated sales of $414.81 million in 2015, up from $367.33 million in 2014 and $299.38 million in 2013. The increase in the company’s 2015 top-line results was mainly driven by strong semiconductor sales through the third quarter, as well as the acquisitions of high voltage and power control product lines in 2014. Shares of Advanced Energy Industry are currently trading around 13.8-times expected earnings, slightly below the forward P/E multiple of 13.9 for the Semiconductor Equipment industry. Royce & Associates, founded by Chuck Royce, reported owning 1.44 million shares of Advanced Energy Industries Inc. (NASDAQ:AEIS) as of the end of 2015.

The next two pages of this insider trading article discuss the insider buying activity registered at EVINE Live Inc. (NASDAQ:EVLV) and PHI Inc. (NASDAQ:PHII).

After covering the insider purchases of six different corporate insiders at EVINE Live Inc. (NASDAQ:EVLV) on Friday, several Form 4’s submitted with the SEC on the same day revealed that an additional three Directors purchased shares last week. Shares of EVINE Live are up a whopping 47% in the last five trading sessions, with the heavy insider buying activity at the company serving as one catalyst for the stock. Director Lowell W. Robinson purchased 5,000 shares on Thursday at a cost of $1.12 per share, boosting his ownership stake to 37,718 shares. Fred R. Siegel, another member of the company’s Board of Directors, bought a new stake of 12,000 shares a day earlier, which is entirely held through his Individual Retirement Account (IRA). Mr. Siegel also holds a direct ownership stake of 33,570 shares, which includes 22,570 restricted stock units. Last but not least, Director Landel C. Hobbs acquired 20,000 shares on Thursday at $1.06 apiece, which lifted his holding to 59,718 shares.

Just recently, Jeffrey Bronchick’s Cove Street Capital LLC, which currently owns 5.32 million shares of EVINE Live or 9.3% of the company’s total number of outstanding shares, went activist on the company, which may represent another catalyst for its stock. EVINE Live is a digital commerce company that operates a television shopping network, called EVINE Live, through which the company offers a range of proprietary, exclusive and name brand products in the following categories: jewelry & watches, home & consumer electronics; beauty; and fashion & electronics. Given the two strong catalysts for the company’s stock, such as shareholder activism and massive insider buying, it appears that EVINE Live represents an extremely attractive investment opportunity at the moment. In a fourth-quarter letter to investors, Cove Street Capital outlined that EVINE Live “is still in the very early innings of creating a viable home/online shopping network that not only competes with QVC and HSN, but is an online destination as more than 40% of sales are made online.” Cove Street Capital, which boosted its stake in EVINE Live by 4.19 million shares during the second quarter of 2015 to 4.49 million (the investment firm gradually increased its exposure to the company in the subsequent quarters), lost quite some money on their investment in the struggling digital commerce as the company has lost 80% of its market value in the 12 months. Nonetheless, Mr. Bronchick and his team believe that EVINE Live will “be a much better performer in the future”, considering the company’s “future earnings power and the value of its Boston TV station (a hidden but potentially meaningful asset)”. It appears that EVINE Live’s corporate insiders share the same line of thoughts with Cove Street Capital.

Let’s wrap up our discussion by examining the insider buying activity registered at PHI Inc. (NASDAQ:PHII), which saw its most influential insider purchase shares last week. Alton Anthony Gonsoulin Jr., Chairman and Chief Executive Officer, purchased 3,382 units of voting common stock (trading symbol “PHII”) and 12,500 of non-voting common stock (trading symbol “PHIIK”) last week. Following the recent purchases, Mr. Gonsoulin owns 2.04 million units of voting common stock and 1.06 million of non-voting common stock.

PHI is a leading helicopter services company that primarily provides transportation services to customers engaged in the oil and gas exploration, development, and production industry. The company also offers air medical transportation for hospitals and emergency services agencies, as well as performs helicopter maintenance and repair services. PHI operates 155 aircraft dedicated to the oil and gas industry, 104 aircraft dedicated to the air medical segment, and an additional six aircraft dedicated to other operations. The company’s oil and gas operating revenues, which accounted for 57% of total operating revenues in 2015, decreased to $459.61 million in 2015 from $516.91 million in 2014. The decrease was mainly driven by less aircraft on contract and decreased flight hours, which were presumably impacted by depressed crude oil prices, and weakening exploration and development activity in the energy sector throughout 2015. Air medical revenues totaled $312.78 million for 2015, up from $300.21 million in 2014. The increase was primarily attributable to increased transports and rate increases implemented in the first half of 2014. The share price of the company’s non-voting common stock declined 43% in the past 52 weeks, but has gained 11% year-to-date. A total number of nine hedge funds tracked by Insider Monkey owned non-voting common stock of PHI at the end of December 2015. Greg Boland’s West Face Capital owns 3.64 million units of non-voting common stock of PHI Inc. (NASDAQ:PHII) as of the end of the final quarter of 2015.

Disclosure: None