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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 31, 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 an Insider: Corporate insiders are either a company's officers, directors, or any beneficial owners of more than 10% 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. 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 $247.57 billion and is currently trading around $29.47 with a 52-week range of $23.79 to $32.95. The stock has gained 13.52% year to date.

According to an SEC filing on July 31, 2012, William H. Gates III (director) sold a total of 5,000,000 shares at a total value of $147,869,500, through Rule 10b5-1 trading plan. Over the past three months, there have been a total of 16 insider transactions with nine Sell transactions. Key financial metrics for Microsoft are given below:

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

2. Whole Foods Market (WFM): Whole Foods Market engages in the ownership and operation of natural and organic food supermarkets. Whole Foods Market has a market cap of $16.85 billion and is currently trading around $91.78 with a 52-week range of $53.32 to $97.25. The stock has gained 31.91% year to date.

According to an SEC filing on July 31, 2012, Whole Foods Market had three insiders combine sold a total of 4,019,040 shares at a total value of $371,345,301. Multiple insider selling are usually a negative sign. Please refer to the footnote in Form 4 for more details on the ownership. Over the past three months, there have been a total of 40 insider transactions with 37 Sell transactions. Key financial metrics for Whole Foods Market are given below:

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

3. TE Connectivity (TEL): TE Connectivity engages in the design and manufacture of products that connect and protect the flow of power and data inside various products used by consumers and industries. TE Connectivity has a market cap of $14.12 billion and is currently trading around $33.01 with a 52-week range of $26.58 to $37.69. The stock has gained 7.14% year to date.

According to an SEC filing on July 31, 2012, Joseph B. Donahue (EVP, COO and president of transportation solutions) sold a total of 6,100 shares at a total value of $201,745. Over the past three months, there have been a total of four insider transactions and all of them are Sell transactions. Key financial metrics for TE Connectivity are given below:

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

Other notable insider selling transactions (minimum of 6,000 shares) from large-caps filed at the SEC on July 31, 2012, are as follows:

  • EMC Corp. (EMC): EMC develops, delivers, and supports the information and virtual infrastructure technologies and solutions. EMC has a market cap of $55.03 billion and is currently trading around $26.21 with a 52-week range of $19.84 to $30.00. The stock has gained 21.68% year to date. According to an SEC filing on July 31, 2012, Harry L. You (EVP, office of the chairman) sold a total of 9,640 shares at a total value of $249,782.
  • M&T Bank (MTB): M&T Bank provides commercial and retail banking services to individuals, corporations and other businesses, and institutions. M&T Bank has a market cap of $10.86 billion and is currently trading around $85.84 with a 52-week range of $66.40 to $88.00. The stock has gained 12.44% year to date. According to an SEC filing on July 31, 2012, Stephen J. Braunscheidel (executive vice president) sold a total of 7,100 shares at a total value of $609,251.

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 31