Insider Selling at GrubHub Inc. (GRUB) Following Share Price Drop, Cluster of Insider Buying at Malvern Bancorp Inc. (MLVF), Plus More Insider Trading

In a recent study on insider trading, a group of researchers from several top-tier U.S. universities split insider trading into two camps: predictable or routine insider trading activity, and information-rich or opportunistic insider trading activity. The so-called routine insider trading is usually driven by diversification or liquidity reasons. For instance, insider trading watchers may have noticed that Bill Gates trades in a pre-announced, routine fashion. And Mr. Gates’ sales surely do not suggest that Microsoft Corporation (NASDAQ:MSFT) is about to face serious troubles going forward.

Meanwhile, only a small portion of the overall insider buying activity appears to be routine. For example, purchases conducted by newly-appointed Board members or executives to meet stock ownership guidelines could be considered routine. While I consider the purchases completed by newly-appointed insiders as routine, I still discuss some of these purchases in our daily insider trading articles. Although these purchases do not necessarily signal that a company’s stock is undervalued, they can be viewed as a positive sign on most occasions given that the interests of the newly-appointed better align with shareholders’ interests. That being said, the following article will discuss a set of insider transactions reported with the SEC on Monday.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details).

Lightspring/Shutterstock.com

Board Member of Asset-Management Giant Initiates New Stake

According to our insider trading database, no insiders at BlackRock Inc. (NYSE:BLK) had purchased any shares since early 2013 until last week. Board member William S. Demchak initiated a new stake of 1,200 shares on Thursday at a price of $341.11 each.

As exchange-traded funds and other low-fee investment products have been reshaping the financial industry for quite a while, some argue that BlackRock Inc. (NYSE:BLK) represents a must-own stock. The bullish camp of investors and analysts claim that the well-known asset-management giant is well positioned to benefit from the fact that investors are becoming tired of paying hefty fees to asset managers who rarely beat benchmarks. While exchange-traded funds and other low-fee investment products have been performing quite well over the past several years, thanks to the long bull run enjoyed by investors, these financial instruments will not deliver strong performance on a consistent basis. Nonetheless, Argus analysts argue that BlackRock should trade at a premium to other large-cap financial stocks, mainly because of the company’s “above-average operating margins, stable long-term asset inflows, and history of product innovation.” Argus analysts have a price target of $400 on BlackRock shares. The company’s shares are up a little less than 1% year-to-date. Ken Fisher’s Fisher Asset Management reported ownership of 72,061 shares of BlackRock Inc. (NYSE:BLK) as of the end of September.

On the next two pages of this article, I will discuss fresh insider trading activity observed at four other companies.

Cluster of Insider Buying Observed at Malvern Bancorp

Three different insiders at Malvern Bancorp Inc. (NASDAQ:MLVF) purchased shares last week. To start with, Howard A. Kent, the Chairman of the Board of Malvern Bancorp, reported the purchase of 21,719 shares at a price of $17.45 each, of which 1,719 shares are owned by his spouse. Following the recent purchase that occurred on Friday, Mr. Kent currently holds a direct ownership stake of 48,430 shares. Therese H. Woodman, the Vice Chair of the Board at Malvern, snatched up 2,900 shares on Friday at a cost of $17.50 per share, lifting her overall holding to 9,596 shares. Last but certainly not least, President and CEO Anthony C. Weagley bought 7,500 shares on Friday for $17.47 each, 1,000 shares of which are held in his individual retirement account that held 28,595 shares before the purchase. Mr. Weagley also holds a direct ownership stake of 7,611 shares.

Malvern Bancorp Inc. (NASDAQ:MLVF) operates as the parent company of Malvern Federal Savings Bank, which operates through its eight full service financial center offices in Chester and Delaware Counties, Pennsylvania and a private banking loan production headquarters office in Morristown, New Jersey. The cluster of insider buying comes shortly after the company released its financial results for the fourth fiscal quarter that ended September 30. Malvern’s net income for the quarter amounted to $7.7 million, an increase of $6.6 million year-over-year. Nonetheless, the massive increase in the company’s bottom line mainly reflected a $7.8 million-reversed allowance related to net deferred tax assets, which contributed to a net tax benefit of $6.0 million for the quarter. Malvern’s shares are up 1% year-to-date, mainly owing to a gain of 12% enjoyed in the past six months. EJF Capital LLC, managed by Emanuel J. Friedman, was the owner of 549,187 shares of Malvern Bancorp Inc. (NASDAQ:MLVF) at the end of June.

Board Member of U.S. Data Management Company Buys Some Shares

A newly-appointed member of Equifax Inc. (NYSE:EFX)’s boardroom snapped up some shares this past week. G. Thomas Hough, who joined the company’s Board of Directors in early October, purchased 2,000 shares on Friday at prices that fell between $123.52 and $124.37 per share. Following the recent acquisition, Mr. Hough currently owns an aggregate of 3,307 shares.

In late February, U.S. data management company Equifax Inc. (NYSE:EFX) completed the acquisition of Veda Group Limited, a leading provider of credit information and analysis in Australia and New Zealand. The $1.7 billion-acquisition, the biggest-ever acquisition in Australia, marked another step in Equifax’s strategy to “expand into attractive new markets.” The U.S. provider of information solutions, employment and income verifications and human resources business process outsourcing services has seen the value of its shares advance by 11% since the start of the year. Navallier & Associates, founded by Louis G. Navallier, reported ownership of 66,173 shares in Equifax Inc. (NYSE:EFX) via its 13F filings for the September quarter.

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

Cluster of Insider Selling at Chipmaker After Acquisition Approval by Shareholders

Three different executives at Linear Technology Corporation (NASDAQ:LLTC) discarded shares throughout the course of the previous week. Executive Chairman Robert H. Swanson offloaded 20,598 shares on Friday at prices varying from $60.17 to $60.30 per share, all of which were held in a trust fund that holds 291,844 shares following the sale. Mr. Swanson also holds a direct ownership stake of 144,695 shares. David A. Quarles, Vice President of International Sales, sold 3,000 shares last Tuesday at prices between $60.22 and $60.23 per share. After the recent transactions, Mr. Quarles currently owns an aggregate of 57,588 shares. Donald E. Paulus, Vice President and General Manager of the Power Business Unit, liquidated 9,998 shares on Tuesday at a weighted average price of $60.26 per share, cutting his overall holding to 113,013 shares.

In late July, Analog Devices Inc. (NASDAQ:ADI) agreed to buy fellow chipmaker Linear Technology Corporation (NASDAQ:LLTC) for a total consideration of around $14.8 billion. Under the terms of the agreement, Linear shareholders are set to receive $46.00 per share in cash and 0.2321 shares of Analog Devices for each share of Linear owned. Even prior to the announcement of the acquisition agreement, Linear Technology had been viewed as one of the most attractive acquisition targets in the semiconductor industry because of its high margins and engineering talent. Earlier this month, Linear shareholders approved the multi-billion-dollar deal at its Annual Meeting of Stockholders. Jim Simons’ Renaissance Technologies LLC had around 7.40 million shares of Linear Technology Corporation (NASDAQ:LLTC) in its portfolio at the end of the June quarter.

CMO at Well-Known Online Good Delivery Company Sells Shares

One member of GrubHub Inc. (NYSE:GRUB)’s executive team discarded a sizeable block of shares at the end of the previous week. Barbara Martin Coppola, the Chief Marketing Officer of GrubHub since March 2015, liquidated 11,950 shares on Friday at prices that ranged from $38.55 to $38.67 per share. After the recent sale, Ms. Coppola currently holds a mere 1,160 shares of GrubHub.

The insider selling comes shortly after the online food ordering and delivery company released its financial results for the third quarter. Although GrubHub Inc. (NYSE:GRUB) posted sales and earnings that beat Wall Street estimates, the company’s shares fell by around 9% following the earnings release. Investors started to worry about the company’s growth. As some analysts suggest, when investors see that growth rates are starting to peak, they fear slowing growth going forward. The company posted quarterly revenues of $123.5 million, which marked an increase of 44% year-over-year. GrubHub shares are 56% in the green this year. Ross Turner’s Pelham Capital owns 5.77 million shares of GrubHub Inc. (NYSE:GRUB) as of September 30.

Disclosure: None