One REIT and Three Healthcare Companies See Insiders Buying and Selling Stock

The main indices on the US stock market are gaining ground on Tuesday, recovering from yesterday’s declines as markets across the world are in the green. The National Association of Realtors is scheduled to release its report on existing home sales in July tomorrow. In other news, investors are also awaiting Fed chair Janet Yellen’s speech at Jackson Hole on Friday to see if the central bank plans to raise interest rates in September, after other Fed officials have sent positive signals in the last couple of days.

Meanwhile, over the past week, the number of transactions among corporate insiders involving the sale of shares considerably outpaced the number of buying transactions, although the majority of sales was executed under 10b5-1 plans. On our website, we have an extensive database that contains all insider transactions as they are reported with the Securities and Exchange Commission and, for this article, we have selected the five companies with the most interesting insider activity.

Following insider activity can be a profitable strategy, but investors should be aware of some of the challenges that come along with imitating insiders (see more details). Aside from following insiders, we also track over 750 hedge funds and other institutional investors, whose equity portfolios we analyze on a quarterly basis in order to identify stocks that are part of our small-cap strategy (read more about our strategy). This is why, we are also going to mention what the funds in our database think about the companies in question, aside from discussing the latest insider transactions.

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Let’s start with ARMOUR Residential REIT, Inc. (NYSE:ARR), in which both co-CEOs acquired shares yesterday. Jeffrey J. Zimmer, who is also ARMOUR’s president, reported the purchase of 10,000 shares at a weighted average price of $22.11 per unit. Following the transaction, Zimmer owns 63,629 shares of the REIT directly. The second co-CEO, Scott J. Ulm, who is also the Chief Investment Officer of the trust, bought 5,000 shares at $22.07 apiece and increased his exposure to 65,229 shares owned directly. The same two insiders, Messrs. Zimmer and Ulm, acquired 15,000 shares and 10,000 shares of ARMOUR Residential REIT, Inc. (NYSE:ARR), respectively, back in May. Smart money investors (particularly those that we track) don’t seem to be very keen on investing in REIT’s as at the end of June, just four funds in our database held shares of ARMOUR Residential REIT, Inc. (NYSE:ARR), down from six funds a quarter earlier. Since the beginning of the year, ARMOUR Residential’s stock has inched up by 3% and currently sports a dividend yield of 11.74%.

Another company that registered insider buying is Penske Automotive Group, Inc. (NYSE:PAG). Roger S. Penske Jr., the Chairman and CEO of Penske Automotive, reported the acquisition of 300,000 shares in three transactions at a weighted average price of $42.55 per unit. The shares were bought by Penske Automotive Holdings Corp., which following the latest transactions owns approximately 31.37 million shares. Aside from these shares that Mr. Penske owns indirectly, he also indirectly holds 492,185 shares owned by Penske Corporation and has direct ownership of 993,337 shares. Penske Automotive Group is a provider of transportation services and has seen its stock gain a modest 3% year-to-date, even though the company has topped analysts’ EPS and revenue estimates for the last three reported quarters. Among the investors in our database, the number of funds bullish on Penske Automotive Group remained unchanged at 16 during the second quarter, with these funds holding 2.10% of the company’s outstanding stock at the end of June.

Head to the next page, where we are going to take a look at some more insider transactions registered lately.

The Chief Executive Officer of French biotech company Flamel Technologies S.A. (ADR) (NASDAQ:FLML) also acquired shares recently. Michael S. Anderson added 5,000 shares to his directly-held stake, having raised it to 189,250 shares. The securities were acquired yesterday at $14.29 per share. Mr. Anderson’s position also includes 50,000 restricted American Depositary Shares (ADS’s) granted in 2014 under the company’s “Free Share” award program and 50,000 restricted ADS’s, also offered under the “Free Share” award program earlier this month. Flamel Technologies S.A. (ADR) (NASDAQ:FLML) is engaged in formulation development and drug delivery. Its shares have climbed by 22% since the beginning of 2016 and among its largest shareholders are many healthcare-focused funds, such as Kevin Kotler‘s Broadfin Capital, which holds 4.39 million shares and VHCP Management, which mainly invests in biotech stocks and owns 500,000 shares of Flamel Technologies S.A. (ADR) (NASDAQ:FLML) as of the end of June.

Theravance Biopharma Inc (NASDAQ:TBPH) has seen a key executive sell shares in the last couple of days. Bradford J. Shafer, the company’s executive vice-president, general counsel and secretary, unloaded 53,130 shares in several transactions between August 18 and August 22, at an average price of $27.49 per share. One of the transactions involved 4,008 shares used as a “payment of exercise price or tax liability by delivering or withholding securities,” while the other three transactions represented open market or private sales of securities. Following the sales, Mr. Shafer has direct ownership of 195,730 shares of Theravance Biopharma. Even though Theravance Biopharma posted lower-than-expected top- and bottom-line figures for the last two quarters, the stock is up by nearly 70% since the beginning of the year. However, its Vibativ product is seeing strong growth (152% annual sales growth in the US in the second quarter) and analysts are bullish on the stock. A total of 12 funds tracked by Insider Monkey held over 40% of Theravance’s stock heading into the third quarter, compared to nine funds a quarter earlier.

Last but not least, Colin Shannon, president and CEO of PRA Health Sciences Inc (NASDAQ:PRAH) sold 120,000 shares of the company in several transactions over the course of Thursday, Friday and Monday. The chief executive exercised his stock options to acquire 120,000 shares of PRA Health Sciences Inc (NASDAQ:PRAH) at $2.94 per unit and unloaded the shares in four transactions, including 6,867 shares withheld in payment of the exercise price of options. The shares were sold at an average price of $51.56 per share and following the transactions, Mr. Shannon doesn’t hold any shares of PRA Health, but owns 124,637 stock options. The stock of the biotech contract research organization has appreciated by more than 15% year-to-date, boosted by better-than-expected results delivered by the company. However, the popularity of PRA Health Sciences Inc (NASDAQ:PRAH) among the investors we track declined during the second quarter, as the number of funds with long positions in it fell to 18 from 21.

Disclosure: None