Noteworthy Insider Buying and Selling at MiMedx Group, Aetna & Others

It is generally believed that insider buying and selling metrics can provide clues about companies’ future stock price direction. While a vast number of studies show that insider purchases tend to outperform broader stock market benchmarks, insider selling has not been found as informative as insider buying. This is because directors and executives can sell shares for a wide range of reasons that are not always related to their companies’ valuations or future prospects. However, just because certain studies fail to demonstrate that insider selling is indicative of future stock performance, it does not mean that insider selling is useless by any means. For instance, heavy insider selling involving three or more insiders may be telling on some occasions, as there is no reason to hold onto a stock if numerous corporate insiders are selling it. Insider Monkey examined dozens of Form 4 filings submitted with the SEC on Thursday and pinned down five companies with noteworthy insider transactions.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

This Regenerative Medicine Company Had Its CEO Buy Shares Earlier This Week

Let’s begin our discussion by having a close look at MiMedx Group Inc. (NASDAQ:MDXG)’s first insider purchase of the year. Chairman and Chief Executive Officer Parker H. Petit purchased 50,000 shares on Thursday at $6.74 apiece. After the recent purchase, Pete Petit owns 4.92 million shares of MiMedx.

The maker of regenerative biomaterial products and bioimplants has seen its market value decline 28% since the beginning of 2016, mainly due to a disappointing first-quarter earnings report. MiMedx Group Inc. (NASDAQ:MDXG) missed its first-quarter revenue projections, after enjoying a run of seven consecutive quarters of meeting or exceeding revenue guidance. The company’s total revenue increased $12.6 million or roughly 31% year-over-year to $53.4 million, mainly due to higher Wound Care sales. The primary reason behind MiMedx’s top-line shortfall was the impact of the installation of a sophisticated Sales Management System (SMS) on the company’s sales organization. Robert B. Gillam’s McKinley Capital Management acquired a 12,768-share stake in MiMedx Group Inc. (NASDAQ:MDXG) during the March quarter.

The next pages of this daily insider trading article discuss the insider transactions registered at four other companies.

This Plummeting Biopharmaceutical Company’s CEO Bought Some Shares This Week

The co-founder, President and Chief Executive Officer of Concert Pharmaceuticals Inc. (NASDAQ:CNCE), Roger D. Tung, snapped up 19,610 shares on Wednesday for $10.55 each, boosting his direct ownership stake to 538,965 shares. Dr. Tung also owns 121,873 shares indirectly through the Roger D. Tung 2011 GRAT, as well as 13,274 shares and 12,389 shares through the Tung Family Investment Trust and RD Tung Irrevocable Trust, respectively.

Concert Pharmaceuticals Inc. (NASDAQ:CNCE) is a clinical-stage biopharmaceutical company that focuses on applying its knowledge of deuterium chemistry to discover and develop novel small molecule drugs. To be more detailed, the company believes that certain already-approved drugs or advanced clinical candidates can be improved with deuterium substitution to offer better pharmacokinetic or metabolic properties. Concert shares have plummeted 46% since the start of 2016, partly owing to the release of the company’s business highlights, upcoming milestones and financial results for the first quarter. Ken Fisher’s Fisher Asset Management owns 55,934 shares of Concert Pharmaceuticals Inc. (NASDAQ:CNCE as of March 31.

A BDC’s Chairman Made a String of Securities Purchases This Week

John P. Bolduc, Chairman of WhiteHorse Finance Inc. (NASDAQ:WHF)’s Board of Directors, purchased 5,100 shares on Tuesday, 2,264 shares on Wednesday and 9,866 shares on Thursday at prices that ranged from $10.20 to $10.53 per share. After the recent purchases, the Chairman currently owns a stake of 174,376 shares.

WhiteHorse Finance Inc. (NASDAQ:WHF) operates as a business development company (BDC) that originates and invests in senior secured loans to performing small-cap companies across a variety of industries. The BDC’s investment portfolio had a fair value of $417.2 million at the end of March, up from $415.3 million at the end of December. The portfolio consisted of 38 positions across 31 companies with a weighted average effective yield of 11.9%. WhiteHorse Finance made a first-quarter distribution of $0.355 per share, which equates to an annual dividend yield of 13.71%. The shares of the BDC are 9% in the red year-to-date. Israel Englander’s Millennium Management had 33,381 shares of WhiteHorse Finance Inc. (NASDAQ:WHF) in its equity portfolio at the end of December.

FleetCor Technologies Registered Noteworthy Cluster of Insider Selling This Week

FleetCor Technologies Inc. (NYSE:FLT) had seven different insider sell shares earlier this week, but some insider selling was related to freshly-exercised stock options. So let’s have a look at the most prominent insider sales that had nothing to do with stock options. To start with, President and Chief Executive Officer Ronald F. Clarke discarded 290,000 shares on Tuesday at a price of $150.42 per share, cutting his overall holding to 449,283 shares. Moreover, Timothy J. Downs, President of Corporate Lodging Consultants, sold 13,180 shares on the same day for $152.35 each, which trimmed his ownership to 12,330 shares. Board member Mark A. Johnson unloaded 20,000 units of common stock on Tuesday at a price of $151.80 per unit, after which Mr. Johnson continues to own 99,824 units.

The global provider of fuel cards, commercial payment and data solutions, and workforce payment products and services has seen its market value gain 5% since the beginning of the year despite encountering significant macroeconomic headwinds. The recent spike in insider selling comes shortly after FleetCor Technologies Inc. (NYSE:FLT) released a strong first-quarter earnings report. John Armitage’s Egerton Capital Limited acquired a new stake of 411,132 shares of FleetCor Technologies Inc. (NYSE:FLT) during the first quarter.

Giant Health Insurer Had Executive Sell Big Block of Shares This Week

Aetna Inc. (NYSE:AET) registered a massive insider sale earlier this week. Margaret M. McCarthy, Executive Vice President of Operations and Technology, offloaded 39,169 shares on Tuesday at prices varying from $114.35 to $114.55 per share, cutting her holding to 56,240 shares.

The health insurance giant, which agreed to acquire Humana Inc. (NYSE:HUM) for a rough sum of $37 billion in July 2015, recently revealed plans to continue its Obamacare health insurance business on the public exchanges of all 15 states it currently operates and may expand into new markets as well. This business involves selling individual coverage on exchanges created by the Affordable Care Act, but most insurers have missed profits expectations mainly because of losses generated by their individual Obamacare businesses. Aetna Inc. (NYSE:AET) shares are up by 44% in the past two years and are still trading into positive territory for the year, so some long-term employees may seek to diversify their holdings. Ric Dillon’s Diamond Hill Capital acquired a 788,496-share stake in Aetna Inc. (NYSE:AET) during the March quarter.

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