Today I would like to report to you on conspicuous share transactions by board members or renowned hedge funds. These are known as insider trades. After all, who should be in a better position to judge future developments in companies than board members or major shareholders who are very close to the pulse of the times?
These people’s transactions can provide you with important information. Share purchases are particularly informative. There’s a simple reason for this. While there are many reasons for sales, there’s probably one thing above all behind massive share purchases: The intention to earn money.
Below you will find three companies that attracted attention last week due to interesting insider trades.
The share of the US photocopier and printer manufacturer Xerox came under pressure recently. After the latest earnings report, shares dropped 20%. The reason was disappointing business development in the first quarter: Sales shrank by 2.3% to $1.67 billion. At the same time, the company slipped into the red (-$56 million).
Xerox is suffering from the trend toward digitization, which has accelerated with the pandemic. But that doesn’t seem to bother major shareholder Carl Icahn much. The activist and star investor used the setback to further expand his position. At prices between $16.96 and $17.17, Icahn acquired 2.13 million shares ($36.3 million). The major investor now holds 34.2 million share certificates, which corresponds to 20% of all voting rights.
After the latest earnings report, Hasbro executive Christian Cocks and director Michael Burns collected 12,602 shares. At purchase prices between $87.70 and $89.59, they had to put $1.12 million on the table for the acquisitions.
The company designs, manufactures and markets both traditional toys and high-tech toys. The best-known products from Hasbro include Monopoly, the Game of Life, Transformers and My Little Pony.
Hasbro continued to grow in the starting quarter, increasing sales by 4% to $1.16 billion. However, the group also struggled with higher material and freight prices, which left its mark on profits. Accordingly, adjusted operating profit plummeted 19% to $141.8 million. The operating profit margin declined accordingly from 15.6% to 12.2%.
The Charles Schwab Corporation (SCHW)
At the securities broker Charles Schwab, the board member Walter Bettinger took advantage of a reduced price level to enter the market. At a price of $69.49, Bettinger added 36,640 shares to his portfolio. In total, the value of the share purchases was $2.54 million.
The company divides its sales into Investor Services and Advisor Services. The former represents brokerage, i.e. the provision of a securities account and the processing of orders. Advisor Services also includes bank advisory services. Many institutional investors are also to be found here.
In the starting quarter, revenue declined minimally by 1.1% to $4.67 billion. The bottom line was a quarterly profit of $1.4 billion.