More Insider Selling at Apple Inc. (AAPL) as Shares Trade Near Record Highs; Plus Other Insider Trading

The Dow Jones Industrial Average closed at a record high 11 consecutive days this Friday, the longest streak in decades. Are there any signs that the daily winning streak will come to an end? There may be some signs, but insider trading metrics appear to support the recent rally enjoyed by U.S. equity markets. Stock market participants would normally observe a huge spike in insider selling and a significant drop in insider buying when benchmarks hover around near all-time highs, but insiders keep buying shares.

Investors tracking insider trading behavior should be aware that corporate insiders can sell shares for a number of reasons. They may need the cash for an expensive personal purchase or they may simply sell for diversification purposes. Some insiders may discard shares because they see their company’s competitors stealing market share or observe an unsuccessful marketing campaign – one can never know the reason an insider sells shares unless the insider discloses that in Form 4 filings. However, insiders usually buy shares in their own companies for only one reason – they believe the shares are a bargain and have huge upside. With that in mind, let’s have a look at a set of noteworthy insider purchases and sales reported with the SEC on Friday.

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Executive at Struggling Beauty-Products Maker Buys Huge Block of Shares After Sell-Off

One member of Avon Products Inc. (NYSE:AVP)’s management team snapped up a huge block of shares at the end of the previous week. James S. Scully, Executive Vice President and Chief Operating Officer, bought 150,000 shares on Thursday at a price tag of $4.37 each. The purchase boosted Mr. Scully’s ownership stake to 292,241 shares.

The shares of the manufacturer and marketer of beauty and related products plunged in mid-February following the release of a disappointing earnings report. Avon Products Inc. (NYSE:AVP)’s revenue for the fourth quarter decreased by 2.4% quarter-over-quarter to $1.57 billion, marking the 21^st consecutive quarter of revenue declines. The struggling beauty-products maker has been attempting to restructure in the past several years. For instance, Avon Products sold off its North American business in March 2016, as well as announced plans to cut $350 million in annual costs over a three-year time span at the beginning of the previous year. Analysts at Jefferies recently reiterated their ‘Buy’ rating and price target of $8, saying that the stock’s valuation is compelling after the mid-February sell-off. Avon’s shares are 10% in the red sofar in 2017. Ken Griffin’s Citadel Advisors LLC reported owning 1.78 million shares of Avon Products Inc. (NYSE:AVP) in its latest 13F filing.

The second page of this insider trading article focuses on discussing fresh insider buying observed at two other companies.

Big Insider Purchase at Property and Casualty Insurance Firm After Posting Disappointing Earnings

Our insider trading database shows that United Insurance Holdings Corp (NASDAQ:UIHC) had not seen any corporate insiders buy shares since mid-September 2015 until last week. Sherrill W. Hudson, appointed to the company’s Board of Directors in late May 2013, purchased a total of 24,647 shares on Thursday at prices between $16.10 and $16.30 per share. Mr. Hudson currently owns an aggregate of 114,647 shares.

The insider purchase comes shortly after the property and casualty insurance holding company reported a disappointing bottom-line figure for the fourth quarter and full-year of 2016. United Insurance Holdings Corp (NASDAQ:UIHC) posted a net loss of $10.5 million for the December quarter, as compared to net income of $13.8 million posted a year ago. The drastic change in net earnings was mostly related to catastrophe losses from Hurricane Matthew. Despite absorbing more than $55 million of retained catastrophe losses, which accounted for 8 gross margin points, and suffering margin erosion of 3 or 4 points from deterioration in the non-cat environment in Florida, the company still managed to turn a profit for the year. As one member of UIHC’s management team said during the recently-held earnings call, “to be able to experience 11 or 12 points of unexpected margin erosion and still turn a profit is a pretty fair accomplishment.” The shares of the insurance company are 13% in the past 12 months. Concourse Capital Management, founded by Joseph Mathias, added a 166,000-share position in United Insurance Holdings Corp (NASDAQ:UIHC) to its portfolio during the fourth quarter.

Long-Serving Board Member of Waste Management Company Buys New Stake

One long-serving member of Stericycle Inc. (NASDAQ:SRCL)’s boardroom also bought some shares this past week. Mike S. Zafirovski, who has served as a director of Stericycle since November 2012, acquired a 2,920-share stake on Thursday at a price of $85.67 per share. The first insider purchases made by long-serving employees or Board members represent strong bullish signals, so Mr. Zafirovski’s purchase may convey meaningful information despite its small size.

The waste management company has seen its market capitalization drop by 28% in the past one year. Nonetheless, Stericycle Inc. (NASDAQ:SRCL)’s shares are 7% in the green this year after the company reported strong fourth-quarter financial results. Stericycle, engaged in the business of managing regulated waste and providing a range of related and complementary services, reported revenue of $3.56 billion for the full-year of 2016, up 19.3% year-over-year. The company’s fourth-quarter revenues increased by $18.1 million year-on-year to $906.4 million, with acquisitions contributing with approximately $5.0 million. There were 24 asset managers from our system with equity stakes in Stericycle at the end of December, who amassed 6% of the company’s outstanding shares. Jim Simons’ Renaissance Technologies LLC was the equity holder of 1.25 million shares at the end of 2016.

Let’s shift our focus towards some noteworthy insider selling reported with the SEC last Friday.

Eldest Son of Wal-Mart’s Founder Offloads Massive Amount of Shares

One of the wealthiest citizens of the United States and retired Chairman of Wal-Mart Stores Inc. (NYSE:WMT) offloaded a great deal of shares last week. Samuel Robson Walton, the eldest son of Helen Walton and Sam Walton – the founder of Wal-Mart, discarded 2.46 million shares on Wednesday and 1.91 million shares on Thursday at prices varying from $71.25 to $72.49 per share. These shares were held in the Walton Family Holdings Trust, which owns 144.13 million shares following the recent sales. Mr. Walton also holds a direct ownership stake of 3.34 million shares.

The world’s largest retail chain recently released its fourth-quarter earnings report, sending the shares up 4% so far in 2017. Wal-Mart Stores Inc. (NYSE:WMT)’s fourth-quarter revenue rose 1% year-on-year to $130.9 billion, slightly above analysts’ estimate of $130.2 billion. Meanwhile, comparable sales grew 1.8% year-on-year, ahead of the company’s guidance of 1%-to-1.5%. According to several fresh reports, Wal-Mart has been running a new price-comparison test in more than 1,200 U.S. stores, as well as held meetings with food and consumer products vendors to squeeze lower prices in an attempt to close pricing gaps with German-based discount grocery chain Aldi and U.S. rivals such as Kroger Co (NYSE:KR). The retailer anticipates suppliers to help the giant company beat rivals on head-to-head pricing. Ken Fisher’s Fisher Asset Management owned 5.14 million shares of Wal-Mart Stores Inc. (NYSE:WMT) at the end of December.

More Spontaneous Insider Selling at Apple – Should Investors Be Worried?

While corporate insiders at giant multinational companies usually offload shares via pre-arranged trading plans, a number of insiders at Apple Inc. (NASDAQ:AAPL) have been unloading shares on the open market spontaneously as if a huge storm is coming towards the iPhone maker. Board member Albert Gore Jr. liquidated 215,437 shares on Wednesday at prices that fell between $136.36 and $137.12 per share. Mr. Gore, the former Vice President of the United States, currently owns a total of 230,137 Apple shares. Should investors be worried about the massive sale of Mr. Gore and a number of other high-ranked executives? Not necessarily, but the recent spike in spur-of-the-moment insider selling could make shareholders nervous.

The iPhone maker has seen its market cap rise by 18% since the beginning of the year, with its shares trading roughly a dollar off its 52-week high of $137.48. There is some strong optimism around the company’s 10^th anniversary iPhone, but many market participants seem to question the sustainability of the $130-per-share level due to a seemingly saturated market in China – Apple Inc. (NASDAQ:AAPL)’s largest overseas market. Meanwhile, analysts at BMO Capital recently reiterated their ‘Outperform’ rating on Apple and raised their price target to $160 from $142, citing iPhone portfolio changes anticipated later in 2017. More specifically, “we believe Apple, which already commands the highest selling prices in the industry, will introduce a higher-priced model (or potentially two) in September alongside the standard iterative refresh to iPhone 7,” said BMO analysts in a recent note. Warren Buffett’s Berkshire Hathaway lifted its position in Apple Inc. (NASDAQ:AAPL) by 42.13 million shares during the December quarter to 57.36 million shares.

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