Last week’s turmoil in the stock markets was highlighted by the 469-point drop in the Dow Jones Industrial Average on September 1, which was eventually followed by a two-day appreciation. Statistics say that the recoveries after massive sell-offs outside of recessions are generally strong, but that does not prove to be true yet. The Dow gained slightly over 10 points on September 3, so some corporate insiders might have feared that a broader correction is yet to continue. We have identified three companies that had a large insider selling activity in the last couple of days and we will try to figure out the reasoning behind these transactions. TRACON Pharmaceuticals Inc. (NASDAQ:TCON), Concho Resources Inc. (NYSE:CXO), and Willamette Valley Vineyards Inc. (NASDAQ:WVVI) are the companies we will be discussing in this article. It’s worth remembering that insiders might sell stock for a wide range of reasons unrelated to their companies’ prospects, but the sales amid a market correction might bring some useful insights.
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Let’s begin by reviewing the insider activity at TRACON Pharmaceuticals Inc. (NASDAQ:TCON), a clinical-stage biopharmaceutical company that focuses on the development of novel targeted therapeutics for cancer, age-related macular degeneration, and fibrotic diseases. Jafco Super V3 Investment Limited Partnership, a large shareholder of TRACON, reported selling 8,000 shares at $10.49 per unit on Thursday, trimming its stake to 1.74 million shares. Jafco has been gradually unloading its stake in the biopharmaceutical company, with 29,300 shares sold on aggregate last week, so the sell-offs are not entirely related to the recent pullback of the stock markets. TRACON’s stock has gained nearly 13% year-to-date, in spite of the poor performance over the last month (the stock lost over 17% during this period). It’s quite evident that the stock is news-driven, so any updates on the company’s product pipeline will surely impact its stock. Therefore, potential investors considering putting money into TRACON should keep a close eye on the news surrounding the company. James E. Flynn’s Deerfield Management, one of the 737 investors tracked by Insider Monkey, owns 485,000 shares of TRACON Pharmaceuticals Inc. (NASDAQ:TCON) as of June 30.
We can now move on to Concho Resources Inc. (NYSE:CXO), which had one of its directors sell shares last Thursday. Tucker S. Bridwell sold 2,000 shares for $107.29 each and reduced his holding to 17,473 shares. Surprisingly, the stock of the independent oil and natural gas is over 4% in green so far this year, but the recent drop of the markets had a severe impact on the stock even though it managed to bounce back quickly. The growing concerns about the global economic slowdown, the oil supply glut and China’s economic pullback in particular might put more downward pressure on oil prices in the short-term, so the outlook on the industry Concho operates in is not very bright at the moment. Therefore, it might be the case that the aforementioned director realizes this fact and attempts to cash out his stake. Ken Griffin’s Citadel Investment Group is by far the largest shareholder of Concho Resources Inc. (NYSE:CXO) within our database, holding 2.36 million shares.
Lastly, let’s take a quick look at the insider selling activity at Willamette Valley Vineyards Inc. (NASDAQ:WVVI), a producer and marketer of wines. One of the company’s directors, James L. Ellis, offloaded 1,000 shares at $6.80 apiece, remaining with a 48,300-share position. Even though James Ellis retired from his full-time duties at the company back in 2009, he continues to work part-time on some projects and is still familiar with the company’s operations, activities and development plans. The stock of Willamette Valley Vineyards has delivered a great performance this year, returning nearly 15% year-to-date, despite a slump in August triggered by the broader market decline. The company recently conducted a federal Regulation A public stock offering in order to raise capital for financing two planned boutique wineries. The company offered preferred stock, providing wine enthusiasts special winery access and preferred pricing on wines, as well as a cumulative 5.3% dividend yield at its initial $3.15 share price. Interestingly, Willamette Valley Vineyards created its original winery in 1989 by conducting a self-underwritten public offering under the Federal Regulation A, while the winery was admitted to the NASDAQ Stock Market in 1994. Jim Simons‘ Renaissance Technologies owns 21,700 shares of Willamette Valley Vineyards Inc. (NASDAQ:WVVI) as of June 30.
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