Insiders made noteworthy buys (see definition below) in two finance sector stocks this past week (May 29th to June 1st, 2012), and sold three others in the finance and industrial sectors. These, along with insider buys and sells last week in other sectors and groups (discussed in prior articles on the basic materials and energy and healthcare sectors), were selected based on a review of over 1,200 separate SEC Form 4 (insider trading) filings last week, as part of our daily and weekly coverage of insider trades.
The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):
Illinois Tool Works Inc. (ITW): ITW is a manufacturer of plastic and metal fasteners and fastening tools for the construction, automotive, and appliance markets. Last week, on Tuesday and Thursday, two insiders filed SEC Forms 4 indicating that they exercised options to acquire 60,000 shares and sold 188,500 shares for $10.5 million, in comparison to insiders selling 0.63 million shares in the past year.
ITW reported its Q1 (March) on April 24th, with revenues coming in-line and beating analyst earnings estimates (97 cents vs. 95 cents), and guiding Q2 earnings higher ($1.08-$1.16 vs. $1.07). Its shares have been consolidating since the report, given the mayhem in May, and currently trade at 11-12 forward P/E and 2.6 P/B compared with averages of 13.5 and 3.0 for its peers in the general industrial machinery group, while earnings are projected to rise at a strong 12.3% annual rate from $3.74 in 2011 to $4.72 in 2013. The stock was recently upgraded by JPMorgan to overweight, and of the 21 analysts that currently cover it, eight rate it buy/strong buy, eleven rate it at hold, and the remaining two rate it ant underperform.
In addition to ITW, insiders also reported noteworthy sells last week in three other financial and industrial sector stocks including:
- Southern Co. (SO), that is a holding company engaged in generation, transmission and distribution of electricity serving customers in the southeastern U.S. in AL, GA, FL, MS and NC, in which EVP Anthony Topazi filed SEC Forms 4 indicating that he exercised options and sold the resulting 125,385 shares for $5.8 million, in comparison with 0.85 million shares sold in the past year (insiders also purchased a minor 2,000 shares last week);
- Allstate Corp. (ALL), a provider of personal property, casualty, life insurance and retirement and other investment products, in which EVP Michele Mayes filed SEC Form 4 indicating that she exercised options and sold the resulting 41,136 shares for $1.4 million, in comparison to insiders selling 57,786 shares in the past year; and
- Equity Residential (EQR), that is a REIT engaged in acquiring, developing, owning and managing multi-family properties located in the U.S., in which three insiders filed SEC Forms 4 indicating that they sold 22,879 shares (with 12,879 of those shares acquired by the exercise of options) for $1.4 million, in comparison to insiders selling 0.35 million shares in the past year.
On top of these, insiders also reported noteworthy buys this past week in the finance sector in:
- AON Corp. (AON), that brokers insurance products, and provides risk management services, HR consulting and outsourcing services worldwide, in which two insiders filed SEC Forms 4 indicating they purchased 3,030 shares for $143,062, the only insider purchase in the past year (insiders also sold a minor 1,300 shares last week); and
- Old Republic International Corp. (ORI), that is engaged in underwriting insurance products in the U.S., including property and liability, mortgage guaranty, title and life and health insurance, in which two insiders filed SEC Forms 4 indicating that they purchased 13,500 shares for $133,325, the only insider purchases in the past six months.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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