The U.S. equity markets closed down almost 2% on Friday, a day after the Federal Reserve decided to leave interest rates unchanged. The primary reasons why the Fed did not pursue a rate hike this month were the concerns about a global economic slowdown and a low inflation rate in the United States. It appears that the growing concerns around the fragile global economy stand behind the stock markets plunge on Friday as well, with the Dow Jones Industrial Average having declined by 290.16 points. In the meantime, some corporate executives started offloading their holdings, which might indicate that their companies are set to experience a troubling future ahead. Energy Focus Inc (NASDAQ:EFOI), Perry Ellis International Inc. (NASDAQ:PERY), and Healthequity Inc (NASDAQ:HQY) saw some of their executives sell shares last week, so it might be worthwhile to take a closer look at what could possibly explain their moves. Although insiders may sell stock for reasons unrelated to their companies’ prospects, it is hard to believe that they would need quick capital amid turbulent times (i.e. insiders confident in their companies’ future prospects would rather raise capital after the storm is over).
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Energy Focus Inc (NASDAQ:EFOI) had an unusual volume of insider selling activity this week, with three different insiders selling sizable portions of their stakes. Jiangang Luo, one of the company’s directors, reported unloading 391,304 shares on Wednesday at a price of $15.98 per share, trimming his stake to 519,565 shares. Similarly, Gina Huang and Bright Horizon Partners Inc., two large shareholders of the company, sold 434,783 shares and 391,304 shares, correspondingly. Following the transactions, the former currently holds 417,390 shares, while the latter reduced its stake to 639,130 shares. It is worth noting that all these shares were sold through a registered underwriting offering, which also included the sale of 1.5 million shares by the company itself. The shares of Energy Focus had advanced by over 464% since the beginning of the year through September 9, which marked a turnaround point for the stock. Even though the stock has lost almost half of its value since then, it is still nearly 200% in the green year-to-date. Interestingly, the aforementioned underwritten follow-on offering of shares stands behind the stock’s recent significant plunge. Among the funds we track, Brandon Osten’s Venator Capital Management initiated a 68,502 share-stake in Energy Focus Inc (NASDAQ:EFOI) during the second quarter.
Let’s move on to Perry Ellis International Inc. (NASDAQ:PERY), which had two different insiders sell shares last week. Oscar Feldenkreis, who has been the President and Chief Operating Officer of the company since 1993, reported selling 55,036 shares through multiple transactions at prices in the range of $24.01 – $24.22 per share. After the previous week’s transactions, the executive holds a stake of 963,552 shares. Perry Ellis International’s founder, George Feldenkreis, has recently announced that he is stepping down as chief executive early next year, while his son, Oscar Feldenkreis, will serve as his successor. Going back to the insider trading activity, Stanley Silverstein, who joined the company as President of International Development and Global Licensing back in 2013, offloaded 15,875 shares for $24.03 each and reduced his position to 79,674 shares. Perry Ellis International’s stock performance has been rather disappointing this year, droppi9% since the beginning of the year. Jim Simons’ Renaissance Technologies represents the largest shareholder of Perry Ellis International Inc. (NASDAQ:PERY) within our database, owning 245,818 shares.
Last but not least, two directors of Healthequity Inc (NASDAQ:HQY) sold the company’s shares this week. Specifically, Michael O. Leavitt and Ian Sacks reported selling 135,000 and 150,000 shares, respectively. As a result, Michael Leavitt currently owns 66,000 shares, while the other director holds a stake of 273,417 shares. The shares of Healthequity have delivered a great performance this year, despite being impacted by the recent broader market decline, returning over 21% year-to-date. The company’s financial performance is not disappointing either, which has surely supported the company’s stock performance. Healthequity reported revenue of $30.5 million in the second quarter of fiscal 2016, up 46% year-over-year. Similarly, the company’s net income came to $4.4 million, which yields an increase of 46% from the same quarter a year ago. Richard Driehaus’ Driehaus Capital added a 122,490 share-position in Healthequity Inc (NASDAQ:HQY) during the latest quarter.
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