Insider sales usually are non-informative. Stocks sold by insiders don’t go down, on the average. This is because most insider sales transactions are done for diversification or demand for liquidity. So, the lists of largest insider sales published in the Wall Street Journal or Barron’s really don’t mean much.
Recent research on insider selling has shown that stocks sold under the 10b5-1 plans have large negative abnormal returns. The magnitude of the abnormal returns is about 70 basis points per month calculated by using Carhart’s four factor model. Insider Monkey, your source for free real-time insider trading data, compiled the list of 10 stocks insiders are selling like crazy under 10b5-1 plans over the past few weeks:
1. Netflix (NFLX): Netflix insiders have been exercising their options and selling shares immediately for quite some time now. Theodore Sarandos sold more than 25,000 shares and netted nearly $4 Million in November. Barry McCarthy exercised 100,000 options and sold them for more than $200 each. He netted more than $17 Million. You can check other Netflix insider sales here.
5. The E. W. Scripps Company (SSP): Richard Boehne sold more than 75,000 shares at $10 under a 10b5-1 plan adopted this summer. Several other insiders have been selling as SSP climbed more than 30% over the past 3 months.
7. Sempra Energy (SRE): Debra Reed exercised and sold more than 40,000 options. She netted more than $1 million.
8. Martha Stewart Living Omnimedia Inc (MSO): Martha Stewart sold 83,333 shares under a 10b5-1 plan. We think she is being cautious this time. Charles Koppelman is the only other insider who sold over the past three months.
10. Qualcomm (QCOM): There are several insiders selling QCOM shares under 10b5-1 plans.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.