J C Penney Company Inc (JCP)’s Top Executive Buys Shares; Three Financial Companies See Insider Selling

The US stock market is trading in the green today following the Commerce Department GDP data, which showed the US economy grew by 1.1% in the second quarter. Even though the growth rate missed the projected 1.2%, it was higher than the previous quarter’s figure of 0.8%. Earlier today, Fed Chair Janet Yellen delivered her anticipated speech at the annual Jackson Hole summit, where she suggested that interest rates could be raised in the coming months. Even though the chair didn’t provide a timetable of rate hikes, she expressed optimism regarding the US economy and said that it was “nearing” the goals set by the Fed.

Meanwhile, among corporate insiders, it is business as usual. According to our data, over the course of Thursday, insiders reported around 45 transactions that involved buying shares and close to 100 that involved selling them. We track insider transactions in real time (with small delays), because we believe that insider trading can be a useful tool for retail investors that seek to beat the market (read more details here). With this in mind, we have selected some of the largest insider transactions, which we’ll discuss in this article.

In addition, we will mention the hedge fund sentiment towards the companies in question. As part of our small-cap strategy (read more) we follow over 760 hedge funds and other big institutional investors and we analyze their quarterly 13F filings in order to determine their collective ‘opinion’ towards different companies. Since these funds mainly invest for the long-term, identifying stocks that they are collectively bullish on, can help smaller investors to get a different perspective on a stock.

One of the best ways to imitate insider trading is to follow insider buying, because insiders can sell shares for a variety of reasons, but they buy stock mainly when they are bullish. J C Penney Company Inc (NYSE:JCP) has recently seen one such transaction. On Thursday, Marvin R. Ellison, the company’s President and CEO, reported the acquisition of 50,000 shares at a weighted average price of $9.91 per unit. Following the deal, Mr. Ellison has direct ownership of nearly 2.56 million shares of J C Penney Company Inc (NYSE:JCP). The move comes over a week after the operator of department stores held its 2016 analyst meeting, where it outlined a three-year plan for accelerated growth and provided its expectations for its financial performance after 2017. More specifically, J C Penney Company Inc (NYSE:JCP) said it plans to deliver EPS between $1.40 and $1.55 in 2019 and to achieve compounded annual comparable sales growth of 3% between 2017 and 2019, among other things. Among the investors in our database, 28 funds held around 16.60% of the company’s outstanding stock at the end of June, down from 32 funds that held shares a quarter earlier.

Micro-cap manufacturer of print-related products Cenveo, Inc. (NYSE:CVO) also registered a high-profile insider buying transaction. Cenveo’s President and CEO, Robert G. Burton Sr., bought a total of 13,800 shares in two deals at an average price of $7.36 apiece. Mr. Burton owns 290,558 shares following the latest acquisitions, which includes 81,558 shares acquired under the company’s Employee Stock Split Plan. Cenveo, Inc. (NYSE:CVO)’s stock has inched up by over 5% since the beginning of the year. Unsurprisingly, due to the company’s small size, it remains under the radars of most smart money investors, as just six funds tracked by us held shares of Cenveo, Inc. (NYSE:CVO) at the end of the second quarter, down by one compared to the end of March.

On the next page, we are going to take a look at three companies where insiders have sold shares recently.

On Thursday, Richard Spengler, the Executive Vice-President of Investors Bancorp, Inc. (NASDAQ:ISBC), exercised his stock options to buy 109,999 shares of the company at $5.99 and then sold all of those shares in three transactions at an average price of $11.85 per unit. Mr. Spengler continues to hold 760,212 shares directly following the transactions and additionally, has indirect ownership of 29,858 shares under an employee stock ownership plan (ESOP) and 15,877 shares via a 401(k) plan. However, the VP is not the only insider that has made a sale lately. On August 24, director Robert M. Cashill also converted stock options into 292,499 shares, which he later unloaded in multiple trades. Mr. Cashill retains ownership of 781,902 shares of Investors Bancorp, Inc. (NASDAQ. A week earlier, Piper Jaffray upgraded Investors Bancorp to ‘Overweight’ from ‘Neutral’ and has a $13 price target on the stock, saying that the company can offer “deep value”. The number of investors in our database long Investors Bancorp declined by two to 24 during the second quarter.

Waterstone Financial, Inc. (NASDAQ:WSBF) is another financial company that saw an insider unload shares on Thursday. The company’s Chief Operating Officer and general counsel, William F. Bruss, filed two Form 4’s with the SEC, in which he disclosed the sale of a total of 54,865 shares in 31 transactions. The securities were obtained through the conversion of stock options at an acquisition price of $16.11 per unit and were sold at a weighted average price of $16.72 per share. Following the trades, Bruss has direct ownership of 32,107 shares of Waterstone Financial, Inc. (NASDAQ:WSBF), as well as indirectly holding 43,848 shares via an ESOP, a 401(k) plan and a custodian, with the latter holding just 21 shares. Since the beginning of the year, Waterstone Financial, Inc. (NASDAQ:WSBF)’s stock has gained over 20% and at the end of June, 13 funds in our database held 16.50% of its outstanding stock, including Jim Simons’ Renaissance Technologies, which reported ownership of 2.12 million shares.

Andrew M. Alexander, the President and CEO of Weingarten Realty Investors (NYSE:WRI), sold 55,597 shares of the company on Tuesday and Thursday. The first transaction included only 200 shares sold at a price of $41.50 per unit, while the second one included the other 55,397 shares, which were disposed of at $41.67 apiece. The sales didn’t have a big impact on Alexander’s stake in Weingarten as he still owns around 1.05 million shares of the company. Weingarten Realty Investors (NYSE:WRI) is a real estate investment trust engaged in leasing spaces in shopping centers. Its stock is up by more than 20% year-to-date and offers an annual dividend yield of 3.50%. However, just ten investors tracked by us held long positions in Weingarten Realty Investors (NYSE:WRI) heading into the third quarter.

Disclosure: None