Scripps Networks Interactive Inc. (SNI) and Reliance Steel & Aluminum Co (RS) Witness Some Insider Selling; Other Noteworthy Insider Transactions

Although little research investigates asset managers’ use of insider trading data in their decision processes, there is good reason to believe that at least a small portion of the asset management industry uses this data. After all, a number of renowned investors and researchers have been saying that the use of insider trading can complement one’s investment strategy.

As a general rule, hedge fund firms are extremely secretive and don’t usually reveal how they go about picking their investments and analyzing those investments, but there is a handful of well-known money managers who claim they make use of insider trading data. For instance, successful hedge fund manager Joel Greenblatt, the founder of Gotham Capital, has previously revealed that he takes into account insider trading data. He also suggested that the so-called insider trading anomaly is more prevalent in small and somewhat distressed companies, with the source of abnormal returns from insider trading being related to information asymmetry and insiders having information advantage. The Insider Monkey team processed the Form 4 filings submitted with the SEC on Thursday and pinpointed five companies with noteworthy insider transactions recently.

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The Daughter of Single-Family Property REIT’s Founder Purchases Shares

Let’s begin our discussion of noteworthy insider trading by analyzing the recent insider buying observed at American Homes 4 Rent (NYSE:AMH). Board member Tamara Hughes Gustavson, the daughter of the founder of American Homes 4 Rent, purchased 76,985 Class A shares on Wednesday and 3,696 shares on Thursday at prices varying from $20.47 to $20.60 per share. Ms. Gustavson, the daughter of B. Wayne Hughes, currently holds an ownership stake of 12.98 million shares following the recent purchases.

The publicly-traded REIT focusing on single-family rental homes has seen its market capitalization rise by 23% since the beginning of the year. In mid-October, analysts at JMP Securities started coverage on American Homes 4 Rent (NYSE:AMH) with a ‘Market Outperform’ rating and a price target of $25, citing “outsized” expected rent growth over the next two to three years. As the REIT operates the largest public single-family rental portfolio in the United States, American Homes 4 Rent will benefit strongly from a continued increase in rental rates for single-family homes that has been driven by significant occupancy improvement. Jason Karp’s Tourbillon Capital Partners cut its holding in American Homes 4 Rent (NYSE:AMH) by 21% during the third quarter to 7.82 million shares.

The next two pages of this insider trading articles will lay out more insider transactions reported with the U.S. stock market regulator on Thursday.

Director at BSQUARE Buys Shares After Encouraging Earnings Release

A member of BSQUARE Corporation (NASDAQ:BSQR)’s Board of Directors also bought a rather sizeable block of shares this week. William D. Savoy, who has been on the board since May 2004, snatched up 80,000 shares on Tuesday at a price target of $5.00 per share, boosting his ownership to 247,427 shares.

The shares of the provider of software solutions and related engineering services to companies developing smart, connected systems (e.g. set-top boxes, home gateways, point-of-sale terminals, kiosks, among others) have gained 32% over the past five trading sessions, after the company released its results for the third quarter. BSQUARE Corporation (NASDAQ:BSQR) started a restructuring plan in July by reducing the size of its engineering services organization, a plan that is anticipated to deliver around $2.6 million in annualized cost savings. The company reported revenue of $22.5 million for the quarter, a decrease of 1% compared to the second quarter and 15% relative to the third quarter of 2015. BSQUARE’s shares are down 12% so far this year. Ken Griffin’s Citadel Advisors LLC added a 11,820-share stake in BSQUARE Corporation (NASDAQ:BSQR) to its portfolio during the third quarter.

CEO of High-Flying Aqua Metals Buys Shares Despite Share Price Gain of 112% in 2016

The man at the helm of Aqua Metals Inc. (NASDAQ:AQMS) bought some shares this week as well. Chairman and CEO Stephen R. Clarke, a co-founder of Aqua Metals, bought 20,000 shares on Wednesday at $10.00 apiece. After the recent transaction, Mr. Clarke currently holds a direct ownership stake of 1.03 million shares. The CEO also holds an indirect ownership stake of 732,559 shares held by AIC of Nevada Inc., of which Mr. Clarke is an officer, director and a 19%-shareholder.

Aqua Metals Inc. (NASDAQ:AQMS) has developed an innovative process for recycling lead acid batteries, with the company currently planning to manufacture the equipment and also operate lead acid battery recycling facilities. Just recently, the company produced the first-ever AcquaRefined lead at its first recycling facility in McCarran, Nevada. Aqua Metals’ 12-month plan currently involves expanding the operations at its first recycling facility to 120 tonnes of lead production per day and start the expansion of its business with additional recycling facilities and licensing of its recycling technology and equipment to third parties. Aqua Metals has seen the value of its shares skyrocket by 112% since the start of the year. Nathaniel August’s Mangrove Partners acquired a new stake of 134,282 shares of Aqua Metals Inc. (NASDAQ:AQMS) during the September quarter.

The final page of this article will discuss the recent insider selling activity observed at two other companies.

Custer of Insider Selling at Global Media Company Amid Plans to Stop Licensing Content to Netflix

Three different insiders at Scripps Networks Interactive Inc. (NASDAQ:SNI) trimmed their holdings earlier this week. To start with, President and CEO Kenneth W. Lowe offloaded 29,281 Class A shares on Tuesday at prices that fell between $71.50 and $72.59 per share, cutting his ownership to 222,984 shares. David A. Galloway, a member of the company’s board since 2008, sold out his entire stake of 3,214 shares on Tuesday at a price of $73.49 per share. Last but not least, Chief Operating Officer Burton F. Jablin discarded 7,578 Class A shares on Monday at prices ranging from $72.68 to $72.83 per share, a sale that cut his holding to 28,710 shares.

The global media company and a leading developer of lifestyle-oriented content providing mainly home, food and travel-related programming has seen its market value increase by 28% since the start of the year. Scripps Networks Interactive Inc. (NASDAQ:SNI), whose portfolio of networks includes HGTV, Food Network, Travel Channel, DIY Network, among others, recently decided “not to extend [its] SVOD [subscription video on demand] agreement” with Netflix Inc. (NASDAQ:NFLX) past the end of 2016. The company’s management believes licensing content to Netflix doesn’t represent the best approach to monetize its content in the long term. This decision may hit Scripps Networks Interactive’s top-line quite significantly, considering that Netflix revenue accounted for around 28% of the company’s revenue last quarter. Mason Hawkins’ Southeastern Asset Management was the owner of 10.67 million shares of Scripps Networks Interactive Inc. (NASDAQ:SNI) at the end of September.

Board Member of Metals Service Center Company Sells Shares

One member of Reliance Steel & Aluminum Co (NYSE:RS)’s Board of Directors discarded a block of shares this week. Thomas W. Gimbel sold 23,500 shares on Tuesday at prices that ranged from $78.64 to $78.86 per share. After the recent sale, Mr. Gimbel currently owns a holding of 1.72 million shares.

In early August, the metals service center company acquired full-line metal distributor Alaska Steel Company, a company that provides steel, aluminum, stainless and specialty metals and related processing services to various industries throughout Alaska. However, Alaska Steel’s net sales were a mere $3.9 million for the two months that ended September 30, so Reliance Steel & Aluminum Co (NYSE:RS)’s top line did not get a strong boost from this acquisition last quarter. The company reported consolidated sales of $2.19 billion for the September quarter, down from $2.29 billion recorded for the same period of the previous year. The decrease reflects both lower tons sold and metals prices. The shares of Reliance Steel & Aluminum are up 33% year-to-date. Cliff Asness’ AQR Capital Management acquired a 1.41 million-share stake in Reliance Steel & Aluminum Co (NYSE:RS) during the September quarter.

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