Struggling Jewelry Retailer Registers Insider Buying, Plus Insider Selling at 3 Other Companies

The “information-rich” kind of insider trading activity, namely the kind that is not conducted using pre-arranged trading plans, has slowed meaningfully as most companies near the release of their latest quarterly earnings reports. While most publicly-traded companies have established blackout periods that restrict insiders from trading securities around earnings announcements, there are still some companies registering spur-of-the-moment insider trading at the moment.

Before looking into the fresh insider trading activity registered at several U.S companies, let’s try to understand why investors keep tabs on insider trading metrics. Insider buying usually represents a bullish sign given that corporate insiders buy their own company’s shares for only one reason: that they believe those securities are undervalued. On the other hand, an accurate interpretation of insider selling is much harder, as insiders can sell shares for a wide range of reasons that have nothing to do with their company’s prospects. Even so, heavy insider selling can serve as an alarming signal that may encourage outsiders to start selling shares as well in anticipation of bad times ahead. With that in mind, let’s have a look at some mild insider trading activity reported with the SEC on Wednesday.

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).

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Two Insiders of Diamond Jewelry Retailer Purchase Shares

Signet Jewelers Ltd. (NYSE:SIG) had two different insiders purchase shares earlier this week. To start with, Sebastian Hobbs, Managing Director of the UK Division at Signet Jewelers, bought 500 shares on Monday for $91.72 each, lifting his overall holding to 8,684 shares. Board member Helen E. McCluskey snapped up 1,000 shares on Tuesday at a price tag of $89.91 each, which boosted her stake to 6,197 shares.

The world’s largest retailer of diamond jewelry has seen the value of its stock plummet by 27% since the start of the year, partly owing to concerns about the credit operations of the company and allegations that Signet’s employees swapped customers’ premium diamonds with lesser-quality substitutes. In late June, analysts at RBC Capital Markets lowered their price target on Signet Jewelers Ltd. (NYSE:SIG) to $120 from $140 and reiterated their ‘Outperform’ rating on the stock, citing “controversies around credit receivables sale”, slowing mall traffic and jewelry spending, negative publicity from reports of systematic ‘diamond swapping’, as well as increased uncertainty in the United Kingdom after the Brexit vote. Keith Meister’s Corvex Capital was the owner of 5.93 million shares of Signet Jewelers Ltd. (NYSE:SIG) at the end of March.

Massive Insider Sale Registered at Well-Known Auto Insurer After Earnings Release

Moving on to the camp of companies that witnessed insider selling, an executive of Progressive Corp (NYSE:PGR) offloaded a sizable block of shares earlier this week. John A. Barbagallo, the President of Commercial Lines Group, discarded 24,000 shares on Monday at prices varying from $33.00 to $33.05 per share. After this sizable sale, Mr. Barbagallo currently owns 148,139 shares.

The insider selling comes shortly after the fourth-largest auto insurer in the United States released its financial results for the second quarter of 2016. Progressive Corp (NYSE:PGR) has expanded its line of offerings by selling home insurance alongside its auto coverage. The roll-out of the company’s “Platinum” product, which offers a single offering that combines both home insurance and auto insurance, represents an important growth catalyst for the company. The company’s net premiums written for the second quarter grew by 13% year-over-year to $5.93 billion. Progressive shares are up by 3% thus far in 2016. Ken Fisher’s Fisher Asset Management cut its stake in Progressive Corp (NYSE:PGR) by 13% during the June quarter, to 170,702 shares.

Let’s head to the next page of this article where we’ll discuss the insider selling recorded at two other companies.

Struggling Youth Fashion Retailer Registers More Insider Selling

Kelli D. Molczyk, Vice President of Women’s Merchandising at Buckle Inc. (NYSE:BKE), discarded 4,000 shares last week at a price of $26.71 per share, being the latest executive of the youth fashion retailer to offload shares this week. Kyle L. Hanson, General Counsel, Corporate Secretary, and Vice President, sold 1,000 shares on Tuesday for $26.25 each and 4,400 shares on Wednesday at $26.11 apiece. After the recent transactions, Ms. Hanson holds a direct ownership stake of 21,000 shares.

Buckle Inc. (NYSE:BKE)’s net sales for the three months ended April 30 were $243.54 million, down by a disturbing 10.2% year-over-year. The retailer’s comparable-store net sales plunged by 11.1% year-over-year, reflecting a 9.3% reduction in the number of transactions, a 0.4% decrease in the number of units sold per transaction, as well as a 0.3% decrease in the average retail price per piece of merchandise sold. Fresh same-store sale figures do not spur optimism either. The company’s reported same-store sales for June fell by 10.6% compared to the same month a year earlier. Royce & Associates, founded by Chuck Royce, owned 4.35 million shares of Buckle Inc. (NYSE:BKE) at the end of March.

Insider Selling Increases at Strong Performing Glass Maker

Apogee Enterprises Inc. (NASDAQ:APOG) has witnessed numerous insiders unload shares this month, so let’s have a brief look at the most recent activity. Board member Robert J. Marzec jettisoned 3,000 shares on Monday at prices ranging from $48.00 to $48.05 per share, cutting his ownership to 22,291 shares. Sara L. Hays, another member of the company’s Board, discarded 2,000 shares last Wednesday at prices that fell between $46.54 and $47.46 per share. Following the not-so-distant sale, Ms. Hays currently owns 23,936 shares.

The world leader in certain technologies involving the design and development of value-added glass solutions for enclosing commercial buildings and framing art has seen its shares advance by 10% since the beginning of 2016. Apogee Enterprises Inc. (NASDAQ:APOG)’s net sales for the first quarter of fiscal year 2016 increased by 3.3% year-over-year to $247.88 million. Net sales grew by 4.1% year-over-year on a constant currency basis, partially due to strong performance in the Architectural Framing Systems segment. The glass maker anticipates 10% growth in sales for fiscal 2016, assuming growth in the U.S commercial construction market in the mid-single-digit percentage range. Israel Englander’s Millennium Management owns 257,338 shares of Apogee Enterprises Inc. (NASDAQ:APOG) as of March 31.

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