Often, if company insiders are seen selling, then there’s a positive chance that their company’s stock has reached its peak, or at least on its way there.
GuruFocus once wrote:
“Insiders as a whole are smart investors of their own companies. They tend to sell more when the market is high, and buy more when the market is low. The aggregated activities of Insiders can serve as a good indicator to locate the market bottoms.”
Based on the Insider research series GuruFocus performed in 2010, the study concluded that insider trades have a direct correlation with the ups and downs of the market.
Below are some insider trading highlights for this week.
eBay Inc. (NASDAQ:EBAY)
Mark Carges is eBay’s chief technology officer and senior vice president of global products. He sold 200,000 shares on Jan. 23, at $53.31 per share. The transaction made him more than $10.7 million.
Ebay is an online buy-and-sell hub, that serves as a global commerce platform. Founded in 1995 in San Jose, Calif., eBay serves as the ultimate online marketplace, hosting transactions through PayPal to securely transfer money from buyer to seller.
Trading almost near its 10-year high, eBay has soared in market value over the years. In the last three years, it appreciated 134.05 percent. In the last year, it gained 72.74 percent.
For the full 2012 year, eBay’s revenue reported a 21 percent increase compared to 2011. The company’s commerce volume grew 18 percent, as its worth reached $175 billion. It also increased in non-GAAP earnings per diluted share, driven by double digit user growth, strong gains in mobile adoption and heightened acceleration of the company’s marketplace business. Overall, the company exceeded its fourth quarter expectations.
As seen in the above chart, eBay’s insider trades are colored with sales, relative to its rising value.
This solid performance has locked in confidence for much of eBay’s insiders. In the same week, three other company execs sold chunks of their stake in the company, making millions.
President and CEO John Donahoe sold 250,000 shares on Jan. 22, banking a total of $13.4 million. On the same day Alan Marks, senior vice president of corporate communications sold 31,237, which returned $1.7 million, while Robert Holmes Swan, CFO and finance senior vice president, sold 100,000 shares, valued at $5.4 million
EBay is ranked 3 stars in Business Predictability on GuruFocus. It is currently priced at $56.49, up almost 3 percent in mid-day trading. Gurus who own large amounts of its outstanding shares include Dodge & Cox, Steve Mandel and Eric Mindich.
To view more, visit eBay’s Insider Activity.
Huntington Bancshares Inc. (NASDAQ:HBAN)
President, CEO and Chairman Stephen Steinour bought 40,000 shares of Huntington Bancshares Inc. on Jan. 23. The transaction cost him $281,600 at $7.04 per share. It placed his share total to 2.3 million shares.
Headquartered in Ohio, Huntington Bancshares is the $56 billion bank holding company of Huntington National Bank, which provides a full-service commercial, small business and consumer banking services, among others. Huntington’s six-state banking franchise also reaches Michigan, Pennsylvania, Indiana, West Virginia and Kentucky.
Steinour’s buy is the company’s first insider trade of the year, after activity halted throughout the December holiday season.
In 2012, Huntington’s return on average assets slightly increased by a less than 1 percent, its tangible book value per common share increased by 12 percent, and a 25 percent decline in nonaccrual loans, according to its fourth quarter earnings release.
Huntington also announced a dividend payout of $0.04 per common share, distributed on April 1.
As far as outlook for 2013, Steinour commented:
“We expect to continue seeing the strong growth of the Midwest economy relative to the broader United States. However, business sentiment continues to be negatively influenced by the uncertainty in Washington and its direct impact on the U.S. economy. We remain optimistic that when solutions are in place, the strength of the Midwest and the soundness of our strategy will continue to drive growth.”
Steinour has increased his stake in Huntington almost 20 times since 2009. His holding today totals 2.3 million shares.
With one star in Business Predictability, Huntington trades at $9.97. Though its two Severe Warning Signs denote a decline in per share revenue and inventory build-up, its dividend yield of 2.59 percent is close to a two-year high. Gurus who hold the stock include Arnold Schneider, Diamond Hill Capital and Jim Simons.
To view more, visit Huntington Bancshares’ Insider Activity.
Cardinal Health Inc. (NYSE:CAH)
Cardinal Health is an Ohio-based health care service company that offers cost-effective health care and equipment to more than 60,000 locations. It additionally leads in the manufacturing of gloves, surgical apparel and fluid management products.
There were three insiders who sold some shares of Cardinal Health on Jan. 23.
CEO of Cardinal’s Pharmaceutical Segment Michael Kaufmann made $2.6 million from getting rid of 58,362 shares at $44.95 per share.
Chief Legal and Compliance Officer Craig Morford made $2.1 million from selling 47,274 shares at $45 per share.
Lastly, Executive Vice President, General Counsel and Secretary Steve Falk sold 39,080 shares, also at $45 a piece, making about $1.8 million on the sale.
In the past five years, Cardinal Health has gained 9.58 percent in market value. With its price bobbing throughout 2012, Cardinal’s stock managed to go up 6.88 percent in the last year. Its lowest at $37 in September, Cardinal now trades at $44.93 per afternoon trading.
On Jan. 15, Cardinal paid a quarterly dividend of $1.10 per share to its stakeholders. This rate was a 10.5 percent increase in dividend compared to 2012.
Cardinal is ranked 1 star in Business Predictability on GuruFocus. While its price is close to a three-year high, its P/B ratio is close to a three-year low and P/S ratio is close to a two year low. Gurus who hold the stock include Edward Owens, Andreas Halvorsen and big health care sector player, Larry Robbins.
To view more, visit Cardinal Health’s Insider Activity.
NetSuite Inc. (NYSE:N)
A leading vendor of cloud computing business management software suites, NetSuite enables companies to manage their core business operations in a single system.
On Jan. 22, Chief Technology Officer Evan Goldberg sold 20,000 shares, making $1.3 million. Its trade price was $65.98.
The transaction was only days after Goldberg sold another 20,000 shares, which then made a smidge higher of $1.3 million, since its price per share during the sale was $68.23.
The incredible amount of insiders selling NetSuite shares evidently correspond to the stock’s rising market value. Since 2008, NetSuite has sky-rocketed, from its then price of $8 at year-end, up until today’s $69.97 per share rate.
In the last year, NetSuite surged 61.35 percent. Currently, its stock is up 1.77 percent.
Although NetSuite has not released its fourth quarter 2012 reports as of yet, it has had a prosperous earnings season based off of its third quarter report.
In the period, NetSuite’s revenue increased 31 percent, cash flow increased 61 percent and an increase of $1.8 million in its non-Gaap net income.
Company CEO, Zach Nelson, commented on their successful third quarter.
"As some traditional enterprise software companies struggled, NetSuite again exceeded our stated outlook and delivered record revenue and non-GAAP EPS. Our suite approach transforms how mid-sized companies operate and gives them a business platform more powerful than those used by the world's largest companies. In addition, this year's investments in our product, sales and services approach to bring the benefits of NetSuite to the world's largest companies has been one of the most successful initiatives in our history.”
Nelson’s sell history of NetSuite’s shares stretches three pages long on his GuruFocus Market Overview page.
Gurus who currently hold the stock include Columbia Wanger, Frank Sands and Jim Simons.
To view more, visit NetSuite’s Insider Activity.
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- CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
- Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
- Double Buys:: Companies that both Gurus and Insiders are buying
- Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.