Hot Newly-Public Company and Battered Propane Distributor Witness Insider Buying; Plus Other Insider Transactions

The closer we come to the official kick off the third-quarter earnings season (officially starts on Tuesday with Alcoa Inc. (NYSE:AA) releasing its earnings report before the opening bell), the more likely it is that we observe weak insider trading activity. Despite that, Insider Monkey continues to compile daily sets of noteworthy insider transactions reported with the SEC.

Seasoned investors and analysts are well aware that there are two kind of insider trading: legal and illegal. The media discusses loud cases of illegal insider trading on a consistent basis, leaving the legal kind of insider trading on the sidelines. Illegal insider trading involves transactions executed by Board members, executives and other individuals who have access to material non-public information related to acquisition announcements, earnings releases or other significant news events unknown to the general public. However, retail investors need not worry about whether an insider transaction is illegal or legal. After all, piggybacking on the initial illegal trade without knowing of the illegality is not considered illegal insider trading. Considering that corporate insiders have superior knowledge about their company’s business developments, current challenges and future prospects than any of us, it is no surprise that their transactions tend to be highly scrutinized by the investment community. Without further ado, let’s have a look at a set of insider transactions reported with the SEC on Wednesday.

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Mini-Cluster of Insider Buying at Transitioning REIT

Two different insiders at Investors Real Estate Trust (NYSE:IRET) purchased company stock in the past several trading sessions. To begin with, President and CIO Mark O. Decker Jr. snapped up 2,900 shares on Wednesday at a price tag of $5.84 each. Mr. Decker purchased an additional 2,500 shares last Thursday for $6.09 each and 2,000 shares last Monday at $6.24 apiece. After the recent string of purchases, the President and CIO currently owns 114,538 shares. Moreover, Board member Linda J. Hall bought 5,000 shares on Friday at a price of $5.95 per share, a purchase that lifted her ownership stake to 39,907 shares.

The equity real estate investment trust that owns and operates income-producing real estate properties, which comprise multifamily, healthcare and other properties located in the upper Midwest states of Minnesota and North Dakota, has seen the value of its shares plummet by 16% this year. In early August, Investors Real Estate Trust (NYSE:IRET) inked an agreement to pre-purchase a to-be-built multifamily property with 150 units and 23,600 square feet of retail space for a cash consideration of $47.6 million. Moreover, the REIT agreed to sell 26 senior housing properties in late August for around $236.0 million. These moves relate to the REIT’s plan to transition towards a pure-play multifamily REIT. Ken Griffin’s Citadel Advisors LLC was the owner of approximately 249,000 shares of Investors Real Estate Trust (NYSE:IRET) at the end of June.

The next two pages of this article discuss another set of noteworthy insider transactions reported with the SEC on Wednesday.

Board Member of Battered Propane Distributor Buys Shares on Price Weakness

One member of Ferrellgas Partners L.P. (NYSE:FGP)’s boardroom filed Wednesday to disclose the purchase of company shares. Board member David L. Starling purchased 10,300 shares on Tuesday through multiple transactions at prices ranging from $9.49 to $9.51 per share. Following the recent series of transactions, Mr. Starling currently holds an ownership stake of 14,300 shares.

The insider buying comes shortly after the second-largest retail marketer of propane in the United States posted a much larger-than-expected quarterly loss, which amounted to $668 million versus the net loss of $59 million recorded for the same period of the prior year. Moreover, President and CEO Stephen Warnbold announced his decision to step down, which, combined with the wider-than-expected net loss, sent Ferrellgas Partners L.P. (NYSE:FGP)’s shares plummeting. The shares of the propane distributor are 40% in the red thus far in 2016. Furthermore, the company also warned that the annual distribution rate could be reduced to $1 per unit from $2.05 to reduce its debt load and leverage ratio. Citadel Advisors LLC sold out its stake of 11,185 shares of Ferrellgas Partners L.P. (NYSE:FGP) during the second quarter.

Chairman of Newly-Public Company in Healthcare Space Purchases Shares

One member of Patheon NV (NYSE:PTHN)’s Board of Directors has been on a buying spree in the past several trading sessions. Paul S. Levy, appointed as Chairman of the company’s Board of Directors in March 2016, bought a 5,000-share block in each of the five trading sessions of the previous week at prices varying from $28.83 to $29.95 per share. The 25,000 shares are held by Great Point Ventures LLC, of which Mr. Levy is the sole manager. After the recent set of transactions, the Chairman’s firm currently owns 62,000 shares of Patheon.

The global provider of outsourced pharmaceutical development and manufacturing services completed its initial public offering in late July by offering 29.46 million shares at a public offering price of $21.00 per share. It is important to note that Patheon NV (NYSE:PTHN)’s share price has increased continuously since the IPO and the post-IPO share price has not gone below the initial IPO-price level at all. A little while ago, analysts at Wells Fargo initiated coverage on Patheon with an ‘Outperform’ rating and a valuation range of $31-to-$34, arguing that the company “can drive 20%+ EPS growth for several years by being levered to favorable trends, by driving operational efficiency, and by executing on prudent capital deployment.” Wells Fargo analysts also believe Patheon “benefits from a forward-thinking management team with proven experience executing transformative strategies.” Patheon’s shares are up 17% since the IPO.

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

Board Member of Liquidating REIT Keeps Selling Shares

One member of New York REIT Inc. (NYSE:NYRT)’s boardroom has been trimming his ownership stake quite significantly over the past several days. Board member William M. Kahane discarded 258,134 shares on Monday and 93,818 shares on Tuesday at prices that fell between $9.05 to $9.14 per share. The director also sold 42,951 shares last Thursday and 71,981 shares on Friday. After the recent transactions, Mr. Kahane currently holds an ownership stake of only 24,000 shares.

While the insider selling seems alarming at the first glance, Mr. Kahane’s decision to sell shares is likely related to the real estate investment trust’s plan of liquidation and dissolution. In early, August, New York REIT Inc. (NYSE:NYRT), which owns a portfolio of office and retail properties, announced the commencement of a liquidation process following strong criticism on the part of certain shareholders. The office and retail-property owner plans to sell its assets and distribute the net proceeds to the company’s stockholders, which involves paying down its debt load and return proceed to shareholders. Clint Carlson’s Carlson Capital owned 1.32 million shares of New York REIT Inc. (NYSE:NYRT) at the end of June.

Board Member at Well-Known Off-Price Chain Discards Shares

A member of Ross Stores Inc. (NASDAQ:ROST)’s Board of Directors also offloaded a sizeable block of shares this week. Director Gregory L. Quesnel sold 16,000 shares on Monday at prices that ranged from $64.30 to $64.53 per share. After the recent sale, Mr. Quesnel currently owns 19,370 shares.

The well-known off-price chain has seen the value of its shares advance by 19% this year. Ross Stores Inc. (NASDAQ:ROST) operates two brands of off-price retail apparel and home fashion stores, Ross Dress for Less and dd’s DISCOUNTS. The company’s sales for the three months that ended July 30 increased by $213 million or 7.2% year-over-year to $3.18 billion. The increase in the top line mainly reflects the opening of 77 new stores between early August of 2015 and late July of 2016, as well as a 4% increase in comparable store sales. Although the number of asset managers followed by Insider Monkey with equity stakes in Ross Stores dropped to 35 from 39 during the second quarter, the overall value of the existing stakes rose by 14% quarter-over-quarter to $823.96 million. Aaron Cowen’s Suvretta Capital Management added a 1.16 million-share block in Ross Stores Inc. (NASDAQ:ROST) to its portfolio during the June quarter.

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