High-Flying Hecla Mining Company (HL) and Constellation Brands Inc. (STZ) Register Insider Selling, Plus 3 Companies With Insider Buying

What have corporate insiders been doing during the broader market sell-off experienced in early 2016? Buying, buying, buying, much as they did in the aftermath of the financial crisis of 2008. Insiders were accumulating shares in their own companies at an extremely high rate, and most purchases paid off quite handsomely for insiders. But insider buying activity has stalled lately as U.S stock markets are trading near their all-time highs.

Board members and top-tier executives usually act as value investors when they buy shares of their own companies on the open market, believing that their companies’ shares are greatly underestimating the earnings potential of their businesses. Corporate insiders usually follow billionaire Warren Buffett’s admonition to be greedy when others are fearful, and that’s why insiders have a tendency to beat broader market benchmarks. With this in mind, let’s proceed to a discussion of the fresh insider trading activity registered at five companies.

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).

This Industrial-Product Maker’s CEO Piles Up Shares Amid Stock Price Weakness

Actuant Corporation (NYSE:ATU) is one of the few companies that registered insider buying earlier this week. President and CEO Randal W. Baker purchased 10,795 Class A shares on Monday at prices ranging from $23.12 to $23.15 per share. Mr. Baker was also granted 5,397 restricted stock units under the Actuant Corporation 2009 Omnibus Incentive Plan on the same day. After the recent transactions, the CEO currently owns 69,376 Class A shares.

The insider buying comes shortly after the industrial-product maker released better than expected third quarter of fiscal year 2016 results, though it provided weaker than anticipated guidance for the fiscal fourth quarter. Actuant Corporation (NYSE:ATU) has seen the value of its stock decline by 9% in the past month and by a little less than 2% since the start of the year. Just recently, analysts at BMO Capital Markets lowered their price target on the Wisconsin-based industrial company to $22 from $23, saying that end-market trends, mix and pricing continue to be difficult. Mason Hawkins’ Southeastern Asset Management was the owner of 6.41 million shares of Actuant Corporation (NYSE:ATU) at the end of March.

The next two pages of this article will discuss the insider buying registered at two companies, as well as the fresh insider selling observed at two other companies.

Low-Priced Provider of Equipment to the Semiconductor Industry Registers Insider Buying

Trio-Tech International (NYSEMKT:TRT) recently witnessed the first insider buying of its shares 2016. Director Jason T. Adelman, elected to the Board of Trio-Tech in April 1997, snatched up 2,400 shares on Friday at a price tag of $2.75 each. Mr. Adelman currently holds an ownership stake of 7,400 shares.

The provider of reliability testing equipment and services to the semiconductor industry has seen its market value jump by 17% since the beginning of the year. The company manufactures a portfolio of test equipment used in the “front end’ and the “back end” manufacturing process of semiconductors, as well as distributes complementary products made by other manufacturers. Trio-Tech International (NYSEMKT:TRT)’s revenue for the nine months that ended March 31 was $25.64 million, up from $25.53 million recorded during the same period of the previous year. The increase in overall revenue was mainly driven by an increase in the manufacturing segment and distribution segment in its Singapore operations. The company’s bottom-line more than tripled year-over-year to $599,000. Jim Simons’ Renaissance Technologies owned 127,100 shares of Trio-Tech International (NYSEMKT:TRT) on March 31.

Maryland-Based Independent Commercial Bank CFO Buys Some Shares

Old Line Bancshares Inc. (MD) (NASDAQ:OLBK) also witnessed mild insider buying this past week. Elise Marie Hubbard, Chief Financial Officer and Senior Vice President, snapped up 1,299 shares on Friday at $18.48 apiece, lifting her ownership to 2,585 shares.

The parent company of Old Line Bank, the third-largest independent commercial bank based in Maryland, recently announced plans to close and consolidate three branches. As these three branches have existing Old Line Bank branches within close proximity, the freshly-announced move is set to maximize efficiencies by cutting costs. In December 2015, Old Line Bancshares Inc. (MD) (NASDAQ:OLBK) wrapped up the $7 million cash-and-stock acquisition of Regal Bancorp Inc., a deal that enabled the acquirer to move into the Greater Baltimore market. Old Line shares are 6% in the green thus far in 2016. Matthew Lindenbaum’s Basswood Capital had 396,055 shares of Old Line Bancshares Inc. (MD) (NASDAQ:OLBK) among its holdings at the end of March.

The last page of this article will reveal the insider selling registered at two companies.

Well-Known Wine and Beer Distributor Registers Insider Selling

Constellation Brands Inc. (NYSE:STZ) saw a member of its executive team offload some shares this week. F. Paul Hetterich, President of Beer Division and Executive Vice President, discarded 10,000 shares on Monday at prices between $164.48 and $165.07, cutting his overall holding to 53,486 shares.

The shares of the beer and wine distributor have gained an impressive 14% since the beginning of 2016, as the company’s financial performance has been boosted by strong consumer demand within its Mexican beer portfolio and net sales from the acquired Ballast Point and Meiomi brands. Constellation Brands Inc. (NYSE:STZ) has completed a number of important acquisitions over the past several years, with the most recent one being the $285 million acquisition of Prisoner, which comprised a portfolio of five super-luxury wine brands. Moreover, the third-largest producer of beer for the U.S market also paid about $315 million for Meiomi, a Pinot noir wine brand, in August 2015, as well as acquired Ballast Point, the producer of the Sculpin IPA beer, for $999 million in December 2015. Stephen Mandel’s Lone Pine Capital had 5.90 million shares of Constellation Brands Inc. (NYSE:STZ) in its portfolio at the end of March.

High-Flying Silver and Gold Mining Company Witnesses Increased Insider Selling

Hecla Mining Company (NYSE:HL) has seen two corporate insiders unload shares so far in July. To start with, Board member George R. Johnson sold 5,000 shares on Wednesday at $6.09 apiece, trimming his ownership to 45,000 shares. George R. Nethercutt Jr., another member of the company’s boardroom, discarded 40,000 shares on July 1 for $5.00 each, after which Mr. Nethercutt currently owns 60,536 shares.

The discoverer and producer of silver, gold, lead and zinc has seen its stock skyrocket by 230% since the start of 2016, thanks to the rally in the precious metals sector. In late May, Hecla Mining Company (NYSE:HL) agreed to acquire Mines Management Inc. (NYSEMKT:MGN), a company engaged in the business of exploring mineral priorities containing precious and base metals. Under the terms of the agreement, each Mines share will be exchanged for 0.2218 Hecla shares. The acquirer’s main interest in the acquisition is the target’s Montanore silver-copper project located in Northwest Montana. Israel Englander’s Millennium Management acquired a new stake of 2.34 million shares of Hecla Mining Company (NYSE:HL) during the March quarter.

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