Insiders at Novavax Inc. (NASDAQ:NVAX) Buy Shares on the Dip; Four Other Companies See Notable Insider Transactions

As part of its ongoing crackdown on illegal insider trading at hedge fund firms, the U.S. Securities and Exchange Commission recently accused hedge fund manager Leon G. Cooperman and his firm, Omega Advisors Inc., of insider trading. According to the top U.S. securities regulator, Mr. Cooperman and his firm earned around $4 million when his well-known hedge fund Omega Advisors invested in Atlas Pipeline Partners six years ago based confidential information about the sale of a gas processing facility of which other stock market participants were not aware of.

Clearly, most individuals associate the term “insider trading” with loud insider trading cases such as the one discussed above, but a clear distinction between the “legal” and “illegal” kind of insider trading needs to be made. While illegal insider trading is definitely more profitable than the legal kind of insider trading, past research concludes that outsiders can earn abnormal returns by simply mimicking the legal kind of insider transactions. In the following insider trading article, Insider Monkey will present a list of several noteworthy insider transactions reported with the SEC in the past two days.

Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

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Board Member of Clinical-Stage Vaccine Company Buys Shares After Massive Plunge

One member of Novavax Inc. (NASDAQ:NVAX)’s boardroom purchased a sizable chunk of shares this week. Gail K. Boudreaux, who joined the company’s Board of Directors in June 2015, doubled her ownership stake to exactly 200,000 shares. The freshly-bought 100,000 shares were acquired at prices ranging from $1.44 to $1.45 per share.

The insider buying comes shortly after the clinical-stage vaccine company focused on the development of recombinant nanoparticle vaccines and adjuvants announced that its lead product candidate, a vaccine for a respiratory virus known as RSV-F, did not meet its primary endpoint. As a result, Novavax Inc. (NASDAQ:NVAX)’s stock plunged by around 80%, although it has been recovering in the last couple of days. One explanation for the massive plunge due disappointing trial data stems from the fact that the company issued $300 million in convertible debt due in 2023 earlier this year to fund its operations. Specifically, the company said that the maturity date of the notes “falls well beyond our expectations” for the timing of the vaccine’s commercial launch and that anticipated profits from the vaccine would enable Novavax to repay the debt. And although the clinical-stage company has not abandoned the development of the vaccine just yet, the timing of the possible launch of the vaccine looks quite uncertain. Baker Bros. Advisors, founded by Julian and Felix Baker, owned 2.38 million shares of Novavax Inc. (NASDAQ:NVAX) at the end of the June quarter.

The next two pages of this insider trading article will focus around another set of notable insider transactions reported with the SEC earlier this week.

CEO of Struggling U.S. Bond Insurer Purchases More Shares

To begin with, the man at the helm of Ambac Financial Group Inc. (NASDAQ:AMBC) purchased several blocks of shares in the past several trading sessions. Nader Tavakoli, the Chief Executive Officer of the U.S. bond insurer, purchased 2,100 shares on Friday for $17.92 each, 1,200 shares on Monday at $17.97 apiece and 8,700 shares on Tuesday at a price of $18.11 per share. After the recent string of purchases, Mr. Tavakoli currently owns 266,742 shares.

Ambac Financial Group Inc. (NASDAQ:AMBC) has been recently pressured by shareholder Joseph Pirinea to hire an investment bank to review strategic alternatives. The review could include the potential sale of the company’s core business, as well as share buybacks and the payment of “substantial liquidating dividends” to shareholders. The shareholder already sued the U.S. bond insurer over its exposure to approximately $2.5 billion of debt issued by the Commonwealth of Puerto Rico. Ambac Financial Group was accused of making “numerous materially false and misleading statements” and omitting material facts related to its losses and loss exposure on its public finance bond portfolio that includes $2.5 billion in Puerto Rican bonds. The U.S. bond insurer has seen the value of its shares gain 34% since the start of the year. Royce & Associates, founded by Chuck Royce, reported ownership of 393,088 shares of Ambac Financial Group Inc. (NASDAQ:AMBC) in its 13F filing for the June quarter.

Board Member of Provider of Tax Preparation Services Buys Shares

A member of Liberty Tax Inc. (NASDAQ:TAX)’s Board of Directors also recently increased his ownership of company stock. Board member Robert M. Howard snapped up 10,000 Class A shares on Friday at a weighted average price of $12.66 per share. A total of 938 restricted stock units, which were granted to the Board member in September of 2015, vested on Monday. Following these transactions, Mr. Howard currently owns 60,938 Class A shares.

The provider of tax preparation services in the United States and Canada has seen its market value plunge by 45% since the start of 2016. Liberty Tax Inc. (NASDAQ:TAX) reported revenues of $7.1 million for the first quarter of fiscal 2017 that ended July 31, down from $7.5 million posted in the same period of the prior year. In early September, the company’s Board of Directors approved a quarterly dividend of $0.16 per share, which equates to an annual dividend yield of 4.97%. There were a total of seven hedge funds followed by Insider Monkey with long positions in Liberty Tax at the end of June, up from four recorded at the end of March. Jim Simons’ Renaissance Technologies LLC added an 80,700-share stake in Liberty Tax Inc. (NASDAQ:TAX) to its portfolio of holdings during the April-to-June quarter.

The final page of this article discusses notable insider selling registered at two other companies.

Founder of Parent Company of Investment Banking Firm Jefferies Sells Shares

One of the founders of Leucadia National Corp. (NYSE:LUK) offloaded a sizeable block of shares this week. Joseph S. Steinberg, Chairman of the company’s Board of Directors, discarded 200,000 shares on Wednesday at an average price of $19.04 per share, cutting his direct ownership stake to 1.99 million shares. Mr. Steinberg also holds an indirect ownership stake of 19.78 million shares, which are held by corporations owned by the Mr. Steinberg. Around 2.34 million shares are held in a trust for the Chairman’s children.

The parent company of securities and investment banking firm Jefferies has seen its market cap jump by 9% since the beginning of the year. The investment-bank unit of Leucadia National Corp. (NYSE:LUK) recently reported a profit of $41.2 million for the three months that ended August 31, up massively from the $2.1 million posted in the same period of the previous year. The bottom-line growth was driven by strong revenue in the fixed-income trading business. Jefferies’ fixed-income trading revenue was $195.3 million for the quarter, as compared to a negative $18.2 million recorded a year ago. The investment bank’s overall trading revenue for the quarter surged by approximately 86% year-over-year to $343.6 million. Alex Snow’s Lansdowne Partners acquired a new stake of 1.76 million shares of Leucadia National Corp. (NYSE:LUK) during the second quarter.

COO and Board Member at Leader in Avocado Industry Unload Shares

Two corporate insiders at Calavo Growers Inc. (NASDAQ:CVGW) also unloaded shares in the past several days. To start with, Kenneth J. Catchot, President and Chief Operating Officer, liquidated 30,000 shares on Friday and 5,647 shares on Tuesday at prices varying from $68.25 to $70.00 per share. Following the recent sales, Mr. Catchot currently owns 435,825 shares. Board member Marc L. Brown discarded 500 shares on Monday and 500 shares on Tuesday at prices that fell between $68.46 and $69.26 per share. Mr. Brown currently holds an ownership stake of 8,750 shares.

The shares of the global leader in the avocado industry and the provider of value-added fresh food are up an impressive 38% since early 2016. Calavo Growers Inc. (NASDAQ:CVGW)’s net sales for the nine months that ended July 31 were $688.0 million, an increased of $39.2 million as compared to the same period of the previous year. Richard Driehaus’ Driehaus Capital owned 163,342 shares of Calavo Growers Inc. (NASDAQ:CVGW) at the end of June.

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