Intuit Inc. (INTU), Copart Inc. (CPRT), and J M Smucker Co (SJM) Have Insiders Jettison Shares at an Alarming Pace

Leading Salvage Auto Auction Company Has One Executive Sell Shares

Copart Inc. (NASDAQ:CPRT) has seen a couple of insiders sell shares thus far in 2016, so let’s have a quick look at the most recent insider activity. Paul A. Styer, General Counsel since September 1992 and Senior Vice President since April 1995, sold 13,590 shares on Monday at prices that ranged from $49.25 and $49.51 per share. The freshly-sold block of shares was held in a trust fund called Styer Revocable Trust, which currently holds a stake of 86,460 Copart shares.

The shares of the provider of online auctions and vehicle remarketing services have surged by 28% since the beginning of 2016, which explains the recent insider selling at the company. Copart Inc. (NASDAQ:CPRT)’s service revenues, which account for 87% of the company’s top line, for the nine months that ended April 30 grew by 9.9% year-over-year to $814.89 million. The increase was mainly driven by higher services revenues in North America, which reflected an increase in volume due to higher salvage frequency. The increase was partially offset by a marginal decrease in revenue per car due to lower auction selling prices on average. The operator of facilities that process and sell salvage vehicles to licensed dismantlers, rebuilders and used-vehicle dealers plans to open 15 new locations over the next 12 months.

The hedge fund sentiment towards Copart declined meaningfully during the January-to-March period, as the number of funds from our system with stakes in the company fell to 23 from 33 quarter-over-quarter. Royce & Associates, founded by Chuck Royce, was the owner of 2.53 million shares of Copart Inc. (NASDAQ:CPRT) at the end of March.

Food Giant Registers More Insider Selling

Soon after J M Smucker Co (NYSE:SJM) had three corporate insiders sell shares in mid-June, two other executives followed suit. Jeannette L. Knudsen, Senior Vice President, General Counsel and Corporate Secretary, sold 1,600 shares on Monday at prices that ranged from $145.50 to $145.52 per share, cutting her direct ownership stake to 18,702 shares. Moreover, Barry C. Dunaway, President of Big Heart Pet Food and Snacks, offloaded 3,026 shares on Friday at prices ranging from $144.58 to $144.60 per share, as well as offered 2,000 shares as a bona-fide gift. After the recent transactions, Mr. Dunaway continues to hold 46,443 shares.

The manufacturer of branded food and beverage products known for its jelly has seen its market capitalization spike by 18% since the beginning of 2016. This strong stock performance was followed by a rating downgrade at Jefferies, whose analysts downgraded J M Smucker Co (NYSE:SJM) to “Hold” from “Buy” earlier this month. However, Jefferies analysts increased their price target to $143 from $140, saying that the rating downgrade reflects balanced risks and rewards. Meanwhile, analysts at Credit Suisse reiterated their “Outperform” rating on the food giant and increased the price target on the stock to $158 from $156, citing “solid gains in peanut butter, pet treats, shortening, and spreads”. Moreover, the investment hub also cited management’s costs savings target of $50 million by closing three manufacturing plans as yet another positive catalyst.

A total number of 27 hedge fund vehicles followed by our team were invested in J M Smucker at the end of March, accumulating nearly 5% of its total number of outstanding shares. Dan Loeb’s Third Point LLC cut its stake in J M Smucker Co (NYSE:SJM) by 54% during the first three months of 2016 to 775,000 shares.

Disclosure: None