Tracking insider trades, whether they are purchases or sales of shares, is an important activity any investor should consider doing. This is because insider trades, particularly purchases, may be indicative of better short-term returns based on past research. This is why today, we highlight three firms, Angie’s List Inc (NASDAQ:ANGI), Richardson Electronics, Ltd. (NASDAQ:RELL) and Amkor Technology, Inc. (NASDAQ:AMKR), which have recently seen significant acquisitions of shares by insiders, who are expected to have more information about these companies than the general public.
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We’ll also briefly discuss hedge fund activity on Angie’s List Inc (NASDAQ:ANGI), Richardson Electronics, Ltd. (NASDAQ:RELL) and Amkor Technology, Inc. (NASDAQ:AMKR) to get a more complete picture as to how those in the know are treating these firms. We pay attention to hedge funds’ moves because our research have shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks returned 123.1% since then and outperformed the S&P500 Index by 66.5 percentage points (see more details here). That’s why we believe it is important to pay attention to hedge fund sentiment. Plus, we also don’t like paying huge fees.
Let’s start with Angie’s List Inc (NASDAQ:ANGI), the firm being among the three companies we’re highlighting now which recently saw the greatest number of insider purchases. Just in July alone, we have recorded eight instances of insiders acquiring shares of the firm. The most recent purchase was made by Chief Accounting Officer Charles Hundt, who bought 13,579 shares yesterday at a price of $4.47, which amounts to just over $60,000. On July 29, Director Mark Britto purchased 15,000 shares of Angie’s List Inc for $4.35, at a total cost of $65,250. On July 27, Interim CEO and COO Mark Howell, CFO Thomas Fox, and Director Michael Maurer bought 50,000 shares at $4.15, 4,000 shares at $3.90, and 26,000 shares at $3.75, respectively. Meanwhile, Directors Steven Kapner and John Chuang bought 3,415 shares each at $6.07 per share on July 15. These votes of confidence are especially interesting in light of activist investor Eric Semler’s TCS Capital Management’s disclosure on Wednesday, July 29, of a 5.4% stake in Angie’s List. TCS said that it wanted to open a dialogue with Angie’s List about a potential sale, its CEO selection, and its operations. The involvement of an activist comes as Angie’s List’s stock price has been pummeled, going down by over 20% year-to-date and a more drastic 40% over the past 12 months. Hedge funds Insider Monkey follows appear to be bullish on the stock, however, as total holdings only decreased by 2.45% quarter-over-quarter by the end of the first quarter, to $65.48 million, despite the stock’s 5.78% decline in the first quarter. The stock was also in 15 hedge funds’ portfolios at the end of the first quarter of 2015, up from nine in the previous quarter. Those who were long in the stock were rewarded in the second quarter, when the stock climbed by 4.94%. PAR Capital Management, led by Paul Reeder and Edward Shapiro, established the most outsized position in Angie’s List Inc (NASDAQ:ANGI) in the first quarter, buying 1 million shares worth about $5.87 million. By March 31, Wallace R. Weitz & Co., managed by Wallace Weitz, held the most valuable position in Angie’s List with a $22.9 million position made up of 3.9 million shares.
Next up, we have Richardson Electronics, Ltd. (NASDAQ:RELL). On July 30, Director James Benham acquired 5,000 shares at an average price of $6.60. This is the lone purchase of shares by an insider of Richardson Electronics so far this year. However, it’s important to note that the firm has not seen any insider sales this year as well, or for the entirety of 2014 for that matter. Looking at how hedge funds have been treating Richardson Electronics lately, however, we can see that they appear to be bearish on the firm. While the 10.98% quarter-over-quarter decline in the total value of their holdings, to $52.83 million by the end of the first quarter can be explained mostly by the 10.2% decline in the stock’s price in the first three months of the year, the stock saw fewer hedge funds investing in it by the end of said period. Heading into the second quarter, a total of seven hedge funds tracked by Insider Monkey were long in this stock, down from ten entering the preceding quarter. From April 1 to June 30, the stock fell a further 10.02%. Since June 30, the stock has dipped by another 16.6%, most of it after the company reported a net loss of $5.6 million for the 2015 fiscal year ending May 30, larger than the net loss of about half a million for the previous year, on net sales of $137.0 million, down by 0.7%. Gates Capital Management, led by Jeffrey Gates, held the number one position in Richardson Electronics, Ltd. (NASDAQ:RELL) on March 31, owning 2.9 million shares worth about $26 million. Tom Facciola‘s Tigershark Partners cut the biggest investment of the “upper crust” of funds monitored by Insider Monkey in the first quarter, selling 17,563 shares valued at about $176,000.
Lastly, Amkor Technology, Inc. (NASDAQ:AMKR) Director Roger Anthony Carolin bought 12,000 shares of the firm on July 30 at a price of $4.49 each. This has been the only insider purchase of Amkor shares this year. There has also only been one sale of shares by an insider of the firm this year, which was conducted by EVP Marie Jean Rutten Guillaume on March 5, when she sold 15,000 shares. Recently, Amkor Technology shares slid on Tuesday after it reported worse-than-expected results for its second quarter. Shares of the firm plunged by 17% after it reported adjusted EPS of $0.08, down from EPS of $0.21 during the second quarter of 2014, on revenues of $737 million, down by 4% year-over-year. Analysts were expecting EPS of $0.11 and revenues of about $747 million. In the past month, the stock has slumped by 28.2%. Year-to-date, it has declined by 37.68%, while for the past 12 months, the slide is a deeper 49.72%. The smart money appears to be in-line with the negative news about Amkor Technologies because while heading into the second quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long in this stock, up from 20 one quarter earlier, their aggregate holdings increased by only 17.78% quarter-over-quarter to $97.3 million, even though the stock climbed by 24.44% in the first quarter. This means an outflow of money from the firm’s shares in the period. The smart money was right, as the stock plunged by 32.31% from April 1 to June 30. There were certain funds who were still bullish though. Renaissance Technologies, managed by Jim Simons, held the most valuable position in Amkor Technology, Inc. (NASDAQ:AMKR) in our database as of March 31, with a $19.5 million position made up of 2.21 million shares. Among those who were bearish, David Warren‘s DW Partners cut the largest investment of the 700 funds tracked by Insider Monkey, selling 805,000 shares worth an estimated $5.76 million.
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