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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 sell transactions from large-cap companies (market cap greater than $10 billion) filed at the SEC on July 30, 2012. I have also included the key financial metrics for the first three 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 whenand 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. Microsoft Corporation (MSFT): Microsoft develops, licenses, and supports a range of software products and services for various computing devices worldwide. Microsoft has a market cap of $249.00 billion and is currently trading around $29.64 with a 52-week range of $23.79 to $32.95. The stock has gained 14.18% year to date.

According to SEC filing on July 30, 2012, Gates William H III (Director) sold a total of 5,000,000 shares at a total value of $146,191,500 through Rule 10b5-1 trading plan. Over the past three months, there have been a total of 15 insider transactions with 7 Sell transactions. Key financial metric for Microsoft is given below:

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

2. QUALCOMM, Inc. (QCOM): Qualcomm designs, develops, manufactures, and markets digital telecommunications products and services. Qualcomm has a market cap of $100.75 billion and is currently trading around $59.15 with a 52-week range of $45.98 to $68.87. The stock has gained 8.14% year to date.

According to SEC filing on July 30, 2012, Stern Marc I (Director) sold a total of 21,500 shares at a total value of $1,267,597. Over the past three months, there have been a total of 27 insider transactions with 21 Sell transactions. Key financial metric for Qualcomm is given below:

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

3. Wells Fargo & Company (WFC): Wells Fargo provides retail, commercial, and corporate banking services primarily in the United States. The company operates in three segments: Community Banking; Wholesale Banking; and Wealth, Brokerage, and Retirement. Wells Fargo has a market cap of $180.46 billion and is currently trading around $33.96 with a 52-week range of $22.58 to $34.59. The stock has gained 23.22% year to date.

According to SEC filing on July 30, 2012, Wells Fargo had Two insiders combine sold a total of 54,673 shares at a total value of $1,856,569. Multiple insider selling are usually a negative sign. Over the past three months, there have been a total of 16 insider transactions and all of them are Sell transactions. Key financial metric for Wells Fargo is given below:

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

Other notable transactions (minimum of 5,000 shares) insider selling transactions from large-cap and mid-cap companies filed at the SEC on July 30, 2012 are as follows:

  • 4. Stryker Corporation (SYK): Stryker operates as a medical technology company. The company operates in three segments: Reconstructive, MedSurg, and Neurotechnology and Spin. Stryker has a market cap of $19.91 billion and is currently trading around $52.34 with a 52-week range of $43.73 to $57.15. The stock has gained 5.05% year to date. According to SEC filing on July 30, 2012, Stryker Ronda E (Director) sold a total of 18,000 shares at a total value of $935,226 through Rule 10b5-1 trading plan.
  • 5. AvalonBay Communities, Inc (AVB): AvalonBay engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. AvalonBay Communities has a market cap of $13.94 billion and is currently trading around $146.18 with a 52-week range of $107.54 to $151.23. The stock has gained 11.93% year to date. According to SEC filing on July 30, 2012, Blair Bryce (Chairman of the Board) sold a total of 5,718 shares at a total value of $831,340, through Rule 10b5-1 trading plan.

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

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 Insider Sells Filed On July 30