Schlumberger Limited. (SLB)’s Most Influential Executives Caught Selling Big, Plus Noteworthy Insider Trading at Four Other Companies

History shows that U.S. equities often struggle to impress amid uncertainty over which candidates ultimately lead each party in presidential elections. The worries around the U.S. presidential election surely adds some volatility in equity markets, while a possible withdrawal of the United Kingdom from the European Union, often referred to as Brexit, inevitably adds even more volatility and uncertainty. Meanwhile, last week’s volume of insider buying slightly decreased relative to the previous week and so did the dollar volume of insider selling. Insiders, namely directors and executives, sold nine-times more worth of stock than they bought last week, while the ratio of insider selling over insider buying recorded for the previous week stood at approximately eight. Retail investors would be wise to pay attention to insider buying despite the higher-than-usual uncertainty that resides equity markets at the moment because corporate insiders tend to act as longer-term-oriented investors. Insider Monkey processed numerous Form 4 filings submitted with the SEC on Friday and pinpointed five companies with notable insider trading activity.

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 REIT’s President Has Been on Buying Spree in Recent Weeks

One of New York Mortgage Trust Inc. (NASDAQ:NYMT)’s top-tier executives continues to buy more shares despite having bought a massive block of 454,996 shares in May already. President Kevin M. Donlon purchased 58,004 shares on Thursday at prices varying from $6.28 to $6.34 per share, boosting his overall holding to 519,000 shares. The insider buying activity at this real estate investment trust would have been even more bullish if there were more insiders joining Mr. Donlon in purchasing shares.

New York Mortgage Trust Inc. (NASDAQ:NYMT), a REIT focused on acquiring, financing and managing mortgage-related assets and financial assets, has seen its market value gain 41% in the past three months. The stock is up 18% since the beginning of the year. The REIT currently makes a quarterly cash dividend payment of $0.24 per share, which offers shareholders an extremely attractive annual dividend yield of 15.2%. There were four hedge funds from our system with equity investments in the REIT at the end of the March quarter. Alex Lieblong’s Key Colony Management was the owner of 179,000 shares of New York Mortgage Trust Inc. (NASDAQ:NYMT) at the end of March.

IT Services Provider Witnessed Board Member Buy Shares This Past Week

Rowland T. Moriarty, a member of Virtusa Corporation (NASDAQ:VRTU)’s boardroom, purchased 15,000 shares aggregately on Wednesday and Thursday at prices ranging from $34.37 to $34.88 per share. A total of 7,500 shares of the freshly-bought block of shares are held by a limited liability company called Rubex LLC, of which Mr. Moriarty is the Chief Investment Officer and Managing Member. After the recent purchase, the Board member currently holds a direct ownership stake of 87,303 shares.

The shares of the business consulting and information technology (IT) outsourcing company are down 17% since the start of 2016. Virtusa Corporation (NASDAQ:VRTU)’s revenue for fiscal year that ended March 31 was $600.3 million, up 25% year-over-year. Meanwhile, its GAAP bottom line increased to $44.8 million from $42.4 million reported a year ago. The shares of the IT services provider are changing hands at around 12.8-times expected earnings, below for forward PE multiple of 13.7 for the IT consulting and other services sector. Ken Griffin’s Citadel Advisors LLC acquired a new stake of 97,072 shares of Virtusa Corporation (NASDAQ:VRTU) during the first quarter.

Oil-Services Giant Had Two Top-Tier Executives Offload Shares Last Week

Schlumberger Limited. (NYSE:SLB) saw its most influential and informed executives offload shares this past week. To begin with, Chairman and Chief Executive Officer Paal Kibsgaard sold 32,857 shares on Thursday for $80.00 each, trimming his ownership to 170,000 shares. Moreover, President of Operations at Schlumberger, Patrick Schorn, offloaded 9,128 shares two days earlier at $80.27 apiece. After the recent sale, Mr. Schorn currently holds a stake of exactly 40,000 shares.

While some may see those two executives as rats deserting a sinking ship, Schlumberger, one of the world’s largest oilfield services companies, does not appear to be a sinking ship in the first place. The oil-services giant has seen its shares advance by 12% since the beginning of the year. Most oil and gas producers have heavily reduced their capital spending budgets and costs in the face of lower crude oil prices, which put significant weight on the oil-services sector, whereas the recent run in oil prices has not been accompanied with visible capital spending increases. Schlumberger’s first-quarter revenue fell 16% sequentially to $6.5 billion, mainly due to a sustained drop in activity and increased pricing pressure, as well as project delays, job cancellations and activity disruptions. Ken Fisher’s Fisher Asset Management reported ownership of 4.27 million shares of Schlumberger Limited. (NYSE:SLB) in its latest 13F.

Chairman of Omnicom Group’s Board Sold Shares Last Week

Bruce A. Crawford, Chairman of Omnicom Group Inc. (NYSE:OMC)’s Board of Directors filed Friday to disclose the sale of 22,800 shares at prices that fell between $84.30 and $84.32 per share. Following the sale, Mr. Crawford continues to hold a stake of 128,650 shares.

The global advertising, marketing and corporate communications company has seen its market capitalization increase by 10% thus far in 2016. In early May, Omnicom Health Group, a unit of Omnicom Group, sealed an agreement to acquire a provider of marketing programs for the pharmaceutical and biotech industries, called BioPharm Communications. This is one of a series of acquisitions the company has announced earlier this year to expand its business operations. Just recently, the Board of Omnicom Group Inc. (NYSE:OMC) declared a quarterly dividend of $0.55 per share, which equates to an annual dividend yield of 2.64%. John W. Rogers’ Ariel Investments cut its position in Omnicom Group Inc. (NYSE:OMC) by 13% during the March quarter to 1.27 million shares.

Bank Holding for Talmer Bank Saw Two Insiders Discard Shares in the Past Two Weeks

Talmer Bancorp Inc. (NASDAQ:TLMR) has seen increased insider selling in the past several weeks. Board member Paul E. Hodges III discarded 85,585 Class A shares on Thursday at prices varying from $19.92 to $20.05 per share, cutting his holding to a mere 30,524 shares. Chief Credit Officer James T. Dunn sold 39,412 shares on May 31 at prices that ranged from $19.84 to $19.96 per share, which reduced his ownership to 43,147 shares.

One should note that this wave of insider selling comes a few months after the bank holding company for Talmer Bank registered a massive cluster of insider buying. Talmer shares have gained nearly 14% in the past three months and are up 10% year-to-date. In late January, Talmer Bancorp Inc. (NASDAQ:TLMR) sealed a cash-and-stock deal with Chemical Financial Corporation (NASDAQ:CHFC) to create one of the largest community banks in the Midwest. At closing, Talmer shareholders will receive 0.4725 shares of Chemical Financial common stock and $1.61 per share in cash. Israel Englander’s Millennium Management had nearly 424,000 shares of Talmer Bancorp Inc. (NASDAQ:TLMR) among its holdings at the end of March.

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