Insiders: Earnings season blackout stifles insider trade volume, but here are notable trades that did happen.
Seasonal blackout period keeps buying at bay but sellers still find a way
$DDR, $TIF,$FB,$HHC,$GPS
In this report, we examine stocks that C-level officers and directors bought and sold ending the week of April 6, 2018.
Insiders sell stock for many reasons, but they generally buy for just one – to make money. As a standard, we only look at material amounts of money, $100 thousand or more, as anything less could just be window dressing.
The bar is different with selling, because the natural state of management is to be sellers. This is because most companies provide significant amounts of management compensation packages as stock. Therefore, with selling, we analyze for unusual patterns, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52 week lows.
To learn more about our strategy, visit The Insiders Fund. We welcome your comments on our analysis.
Note: We may own positions, long or short, in any of these names but do not disclose that information nor give those positions extra emphasis in our reports.
This Week's Buys
DDR Corp (NYSE:DDR)
DDR Corp is a REIT concentrating on shopping centers. Upcoming earnings on April 24th haven’t discouraged Director and 10% Owner, Alexander Otto, from buying more of this losing trade.
Otto purchased $22.4 million worth of DDR at an average price of $7.12 between 3/22/18 to 4/2/18. Some investors believe in cutting loses and letting the profits run. Otto has been buying stock in DDR since April 2017 and he is paying less for it each time.
Buy high, buy lower? This is not the traditional way of making money but perhaps Otto is on to something. The REIT pays over 10% at today’s prices. The challenge is, of course, Amazon and the fall of store-based retail.
Tiffany (NYSE: TIF)
Iconic jeweler, Tiffany, has new management and a very rich director that seems to like the stock – a lot.
Francesco Trapani, former CEO of Bulgari, has been dinning at Tiffany & Co. Since August 2017, Trapani has bought over $23 million worth of stock at prices between $89.37 and $96.16 per share.
He’s not alone in his enthusiasm. Chairman of the Board, Farah and Director, Lillie, have each purchased $1 million worth of Tiffany at $97.66 and $96.92.
This Week's Sells
Facebook (NYSE: FB)
Marc Zuckerberg sold $458 million of stock between 3/13/18 and 4/4/18 as part of a planned sale process.
Normally, we don’t talk about these kinds of sales since they don’t provide much information about motive but we thought this one was notable for the optics. Zuckerberg will be testifying before Congress Tuesday about the Facebook privacy and fake news headlines. I wonder if any uninformed congressmen will ask about the insider sales?
Howard Hughes (NYSE:HHC)
Howard Hughes stock has been on a magnificent run the last few weeks making a 52 wk high on 4/6/18. Perhaps that’s the impetus behind CEO David Weinreb’s decision to unload $55.4 million worth of stock representing 23.9% of his holdings.
The Company promptly announced that Weinreb, sold 400,000 shares of HHC common stock in a private transaction to satisfy personal tax obligations arising from the exercise and settlement of shares under the Warrant Purchase Agreement, dated as of November 22, 2010, between him and HHC.
Insider selling has to be scrutinized for the logic behind the sale. People buy stock for one reason, to make money. However, they sell it for many reasons, tax obligations are just one of them.