An exclusive look at the latest insider buying and selling trends from 2iQ Research, the leading provider of insider transactions data to the investment community. In our bi-weekly Insider Brief, 2iQ experts highlight recent directors deals which flag potential risks and opportunities for investors.
WideOpenWest Inc, WOW
This high-speed internet, phone and TV provider went public in May 2017. So far the IPO has been a disappointment for investors. From the issue price of $17 USD, the share drifted downwards and hit bottom at under $9 in December. But recently there have been signs of an upturn. Shortly after Teresa Elder took over as CEO in mid-December 2017 we have seen multiple insiders buying, among them the new CEO and the CFO of the company. Additionally, WideOpenWest has announced a share buyback program with a volume of $50 million and has completed the sale of its Chicago fiber network to a unit of Verizon for $225 million.
Intrum Justitia AB, IJ:SS
Intrum, based in Sweden, is Europe’s leading credit management services group. Their position has been further strengthened by the merger with rival Lindorff which was announced last year. Both the CEO and CIO of the new formed group were active with impressive buying volumes in December. While the CEO was active on the selling side as well, the buying side clearly prevailed. The buying is in line with the upbeat midterm outlook that Intrum gave on its Capital Market Day on December 7th 2017
Faes Farma SA, FAE:SM
We have monitored continuous, multiple insider buying transactions at this Spanish pharmaceutical company. Insiders are continuing to buy into the uptrend that the share price established in mid-2017. There has been no big news on the fundamental front lately. Interestingly however the Faes shares have outperformed both the IBEX35 and its European peers in the health care sector. Together with the insider buying this paints a fairly positive picture for the company.
Intel Corp, INTC
This story has raised eyebrows in the financial community worldwide. Intel CEO Brian Krzanich sold all the Intel shares he could back in November 2017 after he was informed of the Meltdown and Spectre security flaws in Intel processors - well before the company made the problems public in January 2018. Krzanich sold shares worth $39 million, largely from exercised stock options. Thereon Krzanich limited his holding to 250,000 Intel shares, which is the minimum required by his employee agreement as Intel CEO.
The company stated that Krzanich´s selling was not related to the security flaws but had been s part of a 10b5-1 plan. The 10b5-1 is a trading scheme that company executives set up to sell stocks they own at a predetermined time so that they are not accused of insider trading. The issue in Krzanich’s case is that his 10b5-1 was created in late October 2017, just a month before the actual selling. At that time Krzanich already knew about the security flaws. The debate over the legality of this kind of insider transaction may sound ominously familiar to shareholders of Deutsche Börse AG, who faced a similar situation with CEO Carsten Kengeter. Kengeter bought a significant number of shares in Deutsche Börse just before announcing merger talks with the LSE.
Legal or not, Krzanich´s sale was not exactly what you would call a smart move. Nor did it pay off. In early January 2018 after Intel had announced the Meltdown and Spectre vulnerabilities the shares were trading between $44 and $45 – no lower than the $44 Krzanich received when he made his contentious share sales in November.