Corporate insiders, because of their access, have the most up-to-date information on the health of their companies and the industries they operate in. While trading based on material, non-public information is considered fraudulent, and the U.S. is generally viewed as having the strictest laws and enforcement against such illegal insider trading, most believe that such trading does happen around the edges.
Either way, we believe that investors can benefit from the timely knowledge of such transactions, and it is towards this goal that we are initiating our new series on summarizing the most recent major insider filings.
Insider trading as defined here (and by the SEC) includes not just corporate insiders, such as company executives and key employees, but also directors and large shareholders that have access to non-public information. Large shareholders are defined by the SEC for this purpose are those that having beneficial ownership of ten percent of more of the firm’s equity securities (including institutional investors).
Furthermore, like in the 13-D and 13-G filings for Institutions, the SEC Forms 3 and 4 on insider filings are extremely timely, and hence of greater significance, as they must be reported within a few days of the trade.
The following is our summary of the most recent major insider filings during the last week:
Insiders Buying Opko Health Inc. (OPK): OPK develops a broad range of pharmaceuticals and diagnostics as well as ophthalmic instrumentation products. Insiders currently hold 33.5% of company shares, and during the last week, two insiders bought 3.7 million shares or 1.3% of the outstanding shares. This included the company’s CEO and Chairman, Phillip Frost, and the Vice-Chairman and CTO Jane Hsiao. During the past three months, four insiders have bought a net 4.6 million shares or 1.6% of the outstanding shares.
Insiders Selling Zalicus Inc. (ZLCS): ZLCS develops new drugs built from combinations of approved drugs to treat immuno-inflammatory and metabolic diseases. Insiders currently hold 13.0% of company shares, and during the last week, two insiders sold 0.8 million shares or 0.8% of the outstanding shares. This included Kurt C. Wheeler, Managing Director of Clarus Ventures, and MPM Asset Management LLC, that each holds more than 10% of the company’s outstanding shares.
Insiders Buying Armour Residential REIT (ARR): ARR is a REIT primarily investing in adjustable-rate and fixed-rate residential mortgage-backed securities. Insiders currently hold only 1.5% of company shares, and during the last week, two insiders bought 0.2 million shares or 0.6% of the outstanding shares. This included the company’s directors Thomas Guba and Daniel Stanton that together more than doubled their stake in the company. Furthermore, minor amounts of shares were bought by exercising options by co-CEO’s Scott J. Ulm and Jeffrey J. Zimmer, as also by four other directors.
Insiders Selling Pain Therapeutics Inc. (PTIE): PTIE develops abuse-resistant forms of pain management drugs to treat moderate to severe chronic pain. Insiders currently hold 43.5% of company shares, and during the last week, two insiders sold 0.4 million shares or 1.0% of the outstanding shares. This included the company’s COO Friedmann Nadav, and 10% beneficial owner Perry Craig.
Insiders Selling James River Coal Company (JRCC): JRCC is engaged in the exploration and production of steam, bituminous and industrial-grade coal in KY and IN. Insiders currently hold 26.8% of company shares, and during the last week, two insiders sold 1.0 million shares or 2.9% of the outstanding shares. This included Brian Klein, Managing Member of Bellevue, WA-based hedge fund Steelhead Partners LLC, and Steelhead Navigator Master LLP.
Insiders Selling American Capital Ltd (ACAS): ACAS provides investment capital and invests in senior and mezzanine debt/equity of middle market companies in need of capital. Insiders currently hold 2.5% of company shares, and during the last week, famous hedge fund investor John Paulson of Paulson & Co. sold 5.5 million shares or 1.6% of the outstanding shares.
Insiders Selling Avago Technologies Ltd. (AVGO): AVGO is a Singaporean designer of analog ICs for telecom, industrial, automotive, and computing markets. Insiders currently hold 7.2% of company shares, and during the last week, KKR & Co. LP (formerly well-known as LBO firm Kohlberg Kravis Roberts & Co.) sold 32.7 million shares or 13.3% of the outstanding shares.
Insiders Selling Palatin Technologies (PTN): PTN develops peptide and small molecule-based treatments for sexual dysfunction, heart failure, and other conditions. Insiders currently hold 51.3% of company shares, and during the last week, AWM Investment Co., headed by value investors Austin Marxe and David Greenhouse, sold 2.7 million shares or 7.7% of the outstanding shares.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.