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Investors do not like stocks with high P/E ratios as such stocks are likely to be overvalued and their prices are more likely to drop significantly after a disappointing quarter. We do not recommend investors to invest in high P/E stocks. Corporate insiders often have information of the company that other investors do not know. By focusing on insiders’ purchases and sales, we believe we can gain some intelligence about the prospects of high P/E stocks.

Below we compiled a list of 9 stocks with insanely high P/E ratios and are sold by insiders recently. All companies have market cap of at least $2 billion and was sold by at least one insider during the past three months. These stocks significantly outperformed the market this year. We picked the top 9 stocks with highest P/E ratios.

Ticker

Company

P/E

YTD Return

No. of Insiders Selling

CPHD

Cepheid

939.75

65.23%

7

CRM

Salesforce.com

642.05

-2.72%

10

MAC

Macerich Co.

423

1.22%

2

AES

The AES Corporation

357.33

-11.99%

2

IRM

Iron Mountain Inc.

337.9

37.02%

2

KIOR

KiOR, Inc.

328.83

31.53%

1

CNQR

Concur Technologies, Inc.

320.83

-25.86%

4

HCN

Health Care REIT Inc.

220.3

11.05%

2

DNKN

Dunkin' Brands Group

186.53

0.47%

7

Cepheid (NASDAQ:CPHD): Cepheid is a molecular diagnostics company. CPHD has a market cap of $2.4B and a P/E ratio of 939.75. It was sold by seven insiders during the past three months and returned 65.23% since the beginning of this year. Steven Cohen and George Soros both reduced their positions in CPHD by over 50% during the second quarter (check out Soros’ top stock picks).

Salesforce.com (NYSE:CRM): Salesforce.com, Inc. is a provider of enterprise cloud computing applications. CRM has a market cap of $17.4B and a P/E ratio of 642.05. It was sold by ten insiders during the past three months and lost 2.72% since the beginning of this year. Steven Cohen also decreased his position in CRM by 50% during the second quarter (check out Cohen’s top stock picks).

Macerich Co. (NYSE:MAC): The Macerich Company is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and community shopping centers. MAC has a market cap of $6.7B and a P/E ratio of 423. It was sold by two insiders during the past three months and returned 1.22% since the beginning of this year. Clint Carlson sold 90% of his MAC shares during the second quarter.

The AES Corporation (NYSE:AES): AES is a global power company. AES has a market cap of $8.4B and a P/E ratio of 357.33. It was sold by two insiders during the past three months and lost 11.99% since the beginning of this year. Bill Miller decreased his AES position by 54% during the second quarter. D.E. Shaw also reduced his position by 15% (check out David Shaw’s top stock picks).

Iron Mountain Inc. (NYSE:IRM): Iron Mountain is an information management services company. IRM has a market cap of $6.8B and a P/E ratio of 337.9. It was sold by two insiders during the past three months and returned 37.02% since the beginning of this year. Richard Breeden and Ervin Shindell reduced their positions in IRM by nearly 20% during the second quarter.

KiOR, Inc. (NASDAQ:KIOR): KiOR is a renewable fuels company. KIOR has a market cap of $2.0B and a P/E ratio of 328.83. It was sold by one insider during the past three months and returned 31.53% since the beginning of this year.

Concur Technologies, Inc. (NASDAQ:CNQR): Concur is a global provider of on-demand Employee Spend Management solutions. CNQR has a market cap of $2.1B and a P/E ratio of 320.83. It was sold by four insiders during the past three months and lost 25.86% since the beginning of this year. CNQR was not very favored by hedge funds. The biggest holder at the end of June was D.E. Shaw, but Shaw only invested 0.01% of his portfolio in CNQR.

Health Care REIT Inc. (NYSE:HCN): Health Care REIT, Inc. is a real estate investment trust engaged in senior housing and health care real estate. HCN has a market cap of $9.0B and a P/E ratio of 220.3. It was sold by two insiders during the past three months and returned 11.05% since the beginning of this year. Jacob Gottlieb reduced his position in HCN by 60% during the second quarter (check out Gottlieb’s top stock picks).

Dunkin' Brands Group (NASDAQ:DNKN): Dunkin’ Brands) is a franchisor of quick service restaurants serving hot and cold coffee and baked goods. DNKN has a market cap of $3.4B and a P/E ratio of 186.53. It was sold by seven insiders during the past three months and returned 0.47% since the beginning of this year.

Source: 9 Stocks With Insanely High P/E Ratios Insiders Are Selling