Noteworthy Insider Selling Observed At These Three Companies

The Ultimate Software Group Inc. (NASDAQ:ULTI) had one of its executives sell three blocks of shares this week. Senior Vice President and General Counsel Robert J. Manne unloaded an aggregate of 20,000 shares on Tuesday at prices ranging from $173.00 to $176.04 per share and cut his overall stake to 92,208 shares. A few more insiders have been jettisoning small portions of their holdings in the past several months. Witnessing insider selling when share prices are trending down is quite unusual and might serve as reason for concern among investors. The shares of Ultimate Software have embarked on a downtrend since early November 2015, partly because of concerns over depressed IT spending environment, which could result in lower demand for enterprise software. Ultimate Software Group is a cloud provider of people management solutions, widely-known as human capital management (HCM) solutions. The company’s UltiPro product suite assists companies with their HR, payroll, benefits, and talent management activities, among other things. Based on fresh customer counts and other market data, Ultimate Software Group has a market share of approximately 9% for enterprise companies (with more than 1,500 employees), 7% for mid-market companies (with 500-1,500 employees), and roughly 3% for strategic companies (100-499 employees). The cloud provider of people management solutions has enjoyed strong revenue growth in the past several years, with its revenues increasing to $618.08 million in 2015 from $505.94 million in 2014 and $410.40 million in 2013. The hedge fund sentiment towards Ultimate Software Group was positive in the fourth quarter, as the number of money managers with stakes in the company (among those we track) climbed to 22 from 16 quarter-on-quarter. Paul Tudor Jones’ Tudor Investment owns 253,623 shares of The Ultimate Software Group Inc. (NASDAQ:ULTI) as of the end of December 2015.

Avery Dennison Corp (NYSE:AVY) has also witnessed noteworthy insider trading activity on the sell side in the past week or so. Chairman and Chief Executive Officer Dean A. Scarborough unloaded 27,915 shares this Wednesday through multiple trades at prices in the range of $68.57 to $69.69 per share. The CEO currently holds 145,486 shares following the recently-completed sales. There were two other executives who sold shares in the past ten days, though their sales were connected with freshly-exercised stock options. The company’s business primarily involves the production of pressure-sensitive materials and a wide portfolio of tickets, tags, labels and other converted products. Shares of Avery Dennison are up 33% over the past 12 months even if the company experienced slower-than-expected growth in emerging markets throughout 2015. Avery Dennison’s net sales for fiscal year 2015 that ended January 2 totaled $5.97 billion, down from $6.33 billion reported for the prior year. Nonetheless, the company’s net sales grew approximately 5% year-on-year on organic basis. Emerging markets continue to represent an important growth catalyst for the company in the long term even though these markets have been struggling lately. The new wave of economic stimulus around the globe might however inject new dynamism into emerging markets’ economies. It is important to mention that Avery Dennison managed to generate revenue growth and double-digit adjusted earnings growth despite facing weakening economic conditions worldwide. Avery Dennison’s reported adjusted EPS for fiscal 2015 totaled $2.95, up from $2.56 reported for the previous year. Moreover, the company anticipates 2016 EPS in the range of $3.15 to $3.35 per share. Shares of Avery Dennison are currently trading at 16.68 times expected earnings, slightly above the forward P/E ratio of 16.55 for the S&P 500 Index. Jim Simons’ Renaissance Technologies reported owning 565,500 shares of Avery Dennison Corp (NYSE:AVY) in its latest 13F filing

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