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There are many different strategies to trade stocks and one of them is to find the insider trading of stocks. When corporate insiders trade in their own securities, they must report their trades to the Securities and Exchange Commission (SEC), usually within a few business days of the trade. Insider trading cannot be based on material non-public information. However, many investors believe that corporate insiders may have better insight into the growth of the company and its proceedings.

In this article, I will focus on notable insider buy transactions from mid-cap and large-cap companies (market cap greater than $2 billion) filed at the Securities and Exchange Commission on July 19, 2012. I have also included the key financial metrics for each of the companies. You can use this list as a potential starting point for your analysis.

Definition of Insider: Corporate insiders are either a company's officers, directors, or any beneficial owners of more than ten percent of a class of the company's equity securities registered under Section 12 of the Securities Exchange Act of 1934.

Rule 10b5-1 Definition: A rule established by the SEC that allows insiders of publicly-traded corporations to create a trading plan of when and how to buy or sell shares in that company. Rule 10b5-1 allows major holders to buy or sell a predetermined number of shares at a predetermined time. 10b5-1 plans are used by many corporate insiders to avoid the accusations of insider trading, regardless of what nonpublic knowledge he/she may later come to possess.

1. MSC Industrial Direct Co Inc (MSM): MSC Industrial Direct operates as a direct marketer and distributor of metalworking and maintenance, repair, and operations (MRO) products to industrial customers in the United States. MSC Industrial Direct has a market cap of $4.26 billion and is currently trading around $67.96 with a 52-week range of $49.72 to $84.76. The stock has fallen 5.02% year to date.

According to SEC filing on July 19, 2012, Jacobson Mitchell (Director) sold a total of 126,460 shares at a total value of $8,531,977. Over the past three months, there have been a total of 10 insider transactions with 8 Sell transactions. Key financial metrics for MSC Industrial Direct is given below:

The following chart provides the insider trading summary for a three-month and 12-month period.

2. Western Refining, Inc. (WNR): Western Refining operates as an independent crude oil refiner and marketer of refined products. Western Refining has a market cap of $2.18 billion and is currently trading around $23.96 with a 52-week range of $11.17 to $25.76. The stock has gained 80.29% year to date.

According to SEC filing on July 19, 2012, Western Refining had two insiders combine sold a total of 20,000 shares at a total value of $500,452 through Rule 10b5-1 trading plan. Multiple insider selling are usually a negative sign. Over the past three months, there have been a total of 51 insider transactions and all of them are sell transactions. Key financial metrics for Western Refining is given below:

The following chart provides the insider trading summary for a three-month and 12-month period.

3. Stryker Corporation (SYK): Stryker operates as a medical technology company. Stryker has a market cap of $19.86 billion and is currently trading around $52.14 with a 52-week range of $43.73 to $59.04. The stock has gained 4.89% year to date.

According to SEC filing on July 19, 2012, Stryker Ronda E (Director) sold a total of 27,000 shares at a total value of $1,427,975 through Rule 10b5-1 trading plan. Over the past three months, there have been a total of 64 insider transactions and all of them are sell transactions. Key financial metrics for Stryker is given below:

The following chart provides the insider trading summary for a three-month and 12-month period.

Other notable transactions (minimum of 4,000 shares) insider selling transactions from large-cap and mid-cap companies filed at the SEC on July 19, 2012 are as follows:

  • 4. Liberty Global Inc. (LBTYA): Liberty Global, Inc. provides video, broadband Internet, and telephony services primarily in Europe and Chile. Liberty Global has a market cap of $14.29 billion and is currently trading around $52.94 with a 52-week range of $32.06 to $53.32. According to SEC filing on July 19, 2012, Dvorak Bernard G (EVP & Co-CFO) sold a total of 10,000 shares at a total value of $505,000 through Rule 10b5-1 trading plan and this includes both Series A Common Stock and Series C Common Stock. Please refer to the footnote in Form 4 for more details on the ownership.
  • 5. Cognizant Technology Solutions Corp (CTSH): Cognizant Technology Solutions Corporation provides information technology (IT), consulting, and business process outsourcing services in North America, Europe, and internationally. Cognizant has a market cap of $17.95 billion and is currently trading around $58.96 with a 52-week range of $53.54 to $78.00. According to SEC filing on July 19, 2012, Frank Malcolm (Exec. VP, Strategy & Marketing) sold a total of 4,323 shares at a total value of $251,252 through Rule 10b5-1 trading plan.

Sources: Some of the data is sourced from Google Finance, Nasdaq, Finviz, Fidelity, and SEC.gov.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research. The information and data is believed to be accurate, but no guarantees or representations are made.

Source: Notable Large-Cap And Mid-Cap Insider Sells Filed On July 19