Noteworthy Insider Transactions at Target Corporation (TGT), TJX Companies Inc. (TJX) and 3 Other Companies

When choosing securities based on insider trading metrics, retail investors would be wise to pay close attention to several key features that can differentiate informative insider transactions from worthless transactions. As the saying goes, directors and executives mostly buy shares of their own companies on the open market because they believe those securities are undervalued. Some companies may also require newly-appointed leaders to buy and hold a specific amount of shares, but this type of insider buying activity may also serve as a mild bullish signal (i.e. such purchases show that those newly-appointed leaders will act in the best interest of shareholders). Meanwhile, insider selling is much more difficult to interpret, as corporate insiders can unload shares for a wide array of reasons such as tax requirements, diversification plans or cash needs. Thus, insider trading watchers should not interpret each insider sale as a sign of tumultuous times ahead. Having this in mind, let’s proceed to the discussion of several noteworthy insider trading transactions recorded with the SEC on Monday.

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 Discount Retailer Had One Top Executive Buy Shares Last Week

Target Corporation (NYSE:TGT)’s Executive Vice President and Chief Financial Officer, Catherine R. Smith, purchased 5,000 shares on Friday for $67.82 each. Following the recent purchase, Ms. Smith currently holds a direct ownership stake of 16,868 shares.

The merchandise retailer has seen its market value plummet by 17% in the past month, as disappointing first-quarter financial results and weak guidance for the second quarter put pressure on the stock. The company’s poor financial and stock performance can be mainly attributable to the damaging influence of e-commerce giant Amazon.com Inc. (NASDAQ:AMZN), as well as weather-related issues. Target Corporation (NYSE:TGT), which offers its “guests” everyday essentials and fashionable merchandise at discounted prices, said first-quarter sales dropped 5.4% year-on-year to $16.2 billion due to the sale of the pharmacy and clinic businesses to CVS Health Corp (NYSE:CVS) in December 2015. Meanwhile, first-quarter comparable sales rose 1.2% year-on-year, marking the seventh consecutive quarter of same-store sales growth. Columbus Circle Investors, managed by Clifford G. Fox, has 2.36 million shares of Target Corporation (NYSE:TGT) in its equity portfolio as of the end of March.

Let’s move on to the next pages of this insider trading article, where we will discuss several noteworthy insider transactions registered at four other companies.

The Man in Charge of This Provider of Healthcare IT Solutions Bought Some Shares Last Week

The President and Chief Executive Officer of Computer Programs & Systems Inc. (NASDAQ:CPSI), John B. Douglas Jr., filed Monday to disclose the purchase of 3,500 shares, which took place on Thursday, at prices that ranged from $41.93 to $42.05 per share. Mr. Douglas currently holds a direct ownership stake of 179,685 shares.

The shares of the provider of healthcare information technology (IT) solutions and services for rural and community hospitals and post-acute care facilities have dropped 12% since the start of 2016. In early January, Computer Programs & Systems Inc. (NASDAQ:CPSI) completed the acquisition of HHI and its wholly-owned subsidiaries Healthland, AHT and Rycan, which represented the first major acquisition in its entire history. The number of hedge funds monitored by Insider Monkey with stakes in the provider of healthcare IT solutions increased to 12 from nine during the March quarter. Israel Englander’s Millennium Management acquired a new stake of 13,670 shares of Computer Programs & Systems Inc. (NASDAQ:CPSI) during the previous quarter.

This Wound Care Provider’s CEO Can’t Stop Buying Shares

MiMedx Group Inc. (NASDAQ:MDXG)’s most influential executive has been on a buying spree in the past month or so. Chairman and Chief Executive Officer Parker H. Petit bought 20,000 shares on Friday for $6.99 each and 30,000 shares last Tuesday at $6.82 apiece. After the recent purchases, the CEO currently owns 5.01 million shares of MiMedx. Mr. Petit had purchased an additional 90,000 shares this May before the aforementioned transactions.

The developer and marketer of proprietary regenerative biomaterial products and bioimplants missed its first-quarter revenue projection, after meeting or exceeding revenue guidance for seven straight quarters. As a result, the share price of MiMedx Group Inc. (NASDAQ:MDXG)’s stock is down 21% year-to-date. The wound care provider recorded total revenue of $53.4 million for the three months that ended March 31, up from $40.8 reported a year ago. There were 12 ‘hedgies’ tracked by our team with long positions in MiMedx at the end of March. Leonard A. Potter’s Wildcat Capital Management was the owner of 955,365 shares of MiMedx Group Inc. (NASDAQ:MDXG) on March 31.

This Strong-Performing Off-Price Retailer Saw Its CEO Discard Shares Last Week

TJX Companies Inc. (NYSE:TJX) had two executives sell shares this past week, one of whom conducted the sales under a pre-arranged trading plan. President and Chief Executive Officer Ernie L. Herrman discarded 24,000 shares on Friday and 20,000 shares on Thursday at prices varying from $75.50 to $75.76 per share. Following the recent sales, Mr. Herrman continues to own 469,437 shares.

The U.S. off-price apparel and home fashions retailer has seen its market value gain a massive 195% in the past five years and 13% in the past 52 weeks, which makes us believe Mr. Herrman and other long-term employees may seek to diversify their holdings. Soon after releasing a fabulous first-quarter earnings report, analysts at Deutsche Bank raised the price target on TJX Companies Inc. (NYSE:TJX) to $83 from $82 while reiterating their ‘Buy’ rating on the stock, saying that the retailer has been coping relatively well against fast-toughening competition from online shopping competitors. Cliff Asness’ AQR Capital Management trimmed its stake in TJX Companies Inc. (NYSE:TJX) by 28% during the January-to-March period to 1.47 million shares.

Jacobs Engineering Group’s Executive Chairman Sold Massive Block of Shares Last Week

Noel G. Watson, Jacobs Engineering Group Inc. (NYSE:JEC)’s former Chief Executive Officer who serves as Executive Chairman until a new CEO is appointed, sold 33,333 shares on Friday at a price of $49.27 per share. After the recent sale, Mr. Watson currently owns 803,336 shares.

The shares of the provider of technical professional and construction services are 16% in the green thus far in 2016. Jacobs Engineering Group Inc. (NYSE:JEC)’s total revenues for the six months that ended April 1 were $5.63 billion, down from $6.09 billion recorded for the same period of the prior year. In mid-April, the company acquired a cybersecurity firm called the Van Dyke Technology Group in an attempt to expand its IT solution offerings to public sector clients. The freshly-acquired firm specializes in identity and access management, threat mitigation and other cybersecurity solutions. The number of smart money investors from our system with stakes in Jacobs Engineering climbed to 17 from 16 during the first three months of 2016. William Harnisch’s Peconic Partners, LLC added a 214,720-share position in Jacobs Engineering Group Inc. (NYSE:JEC) to its portfolio during the first quarter.

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