Why 'Insider Selling' Can be Misleading: Factset Shares Fall on Nonsense (FDS)

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 |  About: FactSet Research Systems Inc. (FDS)
by: Eddy Elfenbein

Eddy Elfenbein submits: FactSet's (NYSE:FDS) stock is down because the co-founder, Charles Snyder, sold 1 million shares. Note the tense. He already sold the shares. If anyone is keeping track, the company has about 49 million shares outstanding. Synder's sale represents a tiny portion of the company.

It was only a week ago that the stock jumped on its earnings news. There's nothing wrong with Mr. Snyder cashing in. After all, there are a zillion reasons to sell a stock. Maybe he wants to diversify. It's not necessarily because management thinks that the shares going to tank. Snyder still owns over 4 million shares.

It's very easy to draw the wrong conclusions from insider selling.

FDS 1-yr chart:

FDS 1-yr chart