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A study titled "Predictive and Statistical Properties of Insider Trading" by James H. Lorie and Victor Niederhoffer reached the following conclusion:

This study indicates that proper and prompt analysis of data on insider trading can be profitable, although almost all previously published studies have reached the contrary conclusion. When insiders accumulate a stock intensively, the stock can be expected to outperform the market during the next six months. Insiders tend to buy more often than usual before large price increases and to sell more than usual before price decreases.

Based on the findings of this encouraging insider trading study, I screened for companies where at least one insider made a sell transaction filed on August 30. I chose the top five companies with insider selling in dollar terms. Here is a look at the five stocks:

1. Qualcomm Incorporated (NASDAQ:QCOM) is a world leader in 3G and next-generation mobile technologies. For more than 25 years, Qualcomm ideas and inventions have driven the evolution of digital communications, linking people everywhere more closely to information, entertainment and each other.

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Insider sells

Steven Altman sold 284,436 shares on August 28. Steven Altman has served as Vice Chairman of the company since November 2011.

Financials

The company reported results for the third quarter of fiscal 2012 (ended June 24, 2012) on July 18 with the following highlights:

Revenue$4.63 billion
Net income$1.21 billion
Cash$26.5 billion

Outlook

The company gave the following outlook for the fourth quarter of fiscal 2012:

Revenue$4.45 billion to $4.85 billion
EPS$0.62-$0.68

My analysis

The stock has a $82 price target from the Point and Figure chart. The stock has seen steady insider selling since March 2012. There has not been any insider buying since at least March 2012. The stock is currently trading at a forward P/E of 14.96. I am not planning to short this stock before the $82 level.

2. Camden Property Trust (NYSE:CPT), an S&P 400 company, is a real estate company engaged in the ownership, development, acquisition, management and disposition of multifamily apartment communities. Camden owns interests in and operates 200 properties containing 67,917 apartment homes across the United States. Upon completion of seven properties under development, the company's portfolio will increase to 70,125 apartment homes in 207 properties. Camden was recently named by FORTUNE Magazine for the fifth consecutive year as one of the "100 Best Companies to Work For" in America, ranking #7.

Insider sells

  • Keith Oden sold 86,078 shares on August 28-29 and currently holds 397,445 shares of the company. Keith Oden was co-founder of Camden's predecessor companies in 1982 and has served Camden as President and Trust Manager since 1993.
  • Richard Campo sold 86,077 shares on August 28-29 and currently holds 385,014 shares of the company. Richard Campo is Chairman of the Board and Chief Executive Officer of Camden Property Trust.

Financials

The company reported the second-quarter financial results on August 2 with the following highlights:

Revenue$186.0 million
Funds From Operations (FFO)$76.7 million
Cash$52.1 million

Outlook

Camden updated its earnings guidance for 2012 based on its current and expected views of the apartment market and general economic conditions. Full-year 2012 FFO is expected to be $3.50 to $3.58 per diluted share, and full-year 2012 EPS is expected to be $1.94 to $2.02 per diluted share. Third quarter 2012 earnings guidance is $0.88 to $0.92 per diluted share for FFO and $0.30 to $0.34 per diluted share for EPS. Guidance for EPS excludes potential future gains on the sale of properties. The company's 2012 earnings guidance is based on projections of same property revenue growth between 5.5% and 6.5%, expense growth between 2.5% and 3.0%, and NOI growth between 7.5% and 8.5%.

My analysis

The stock has a $81 price target from the Point and Figure chart. The stock has seen steady insider selling since March 2011. There has only been one insider buy transaction since February 2011. The stock is currently trading at a forward P/E of 48.38. I am not planning to short this stock before the $81 level.

3. SBA Communications Corporation (NASDAQ:SBAC) is a first choice provider and leading owner and operator of wireless communications infrastructure in North and Central America. By "Building Better Wireless," SBA generates revenue from two primary businesses - site leasing and site development services. The primary focus of the company is the leasing of antenna space on its multi-tenant towers to a variety of wireless service providers under long-term lease contracts.

Insider sells

Brendan Cavanagh sold 93,639 shares on August 28-29. Mr. Cavanagh has served as Senior Vice President and Chief Financial Officer of the company since September 2008.

Financials

The company reported the second-quarter financial results on August 2 with the following highlights:

Revenue$229.1 million
Net loss$53.5 million
Cash$91.7 million

Net loss for the second quarter of 2012 included a one-time loss of $27.1 million associated with the redemption of certain of the company's 8.0% Senior Notes and 8.25% Senior Notes.

Outlook

The company's guidance for the third quarter is as follows:

Revenue$231 million to $235 million
Adjusted EBITDA$144 million to $146 million

My analysis

The stock has a $100 price target from the Point and Figure chart. The stock has seen steady insider selling since December 2010. There has only been one insider buy transaction since December 2010. I am not interested in shorting the stock before the $100 level.

4. MicroStrategy (NASDAQ:MSTR) is a leading global provider of enterprise software platforms for business intelligence, mobile intelligence, and social intelligence applications. MicroStrategy's BI platform enables leading organizations worldwide to analyze the vast amounts of data stored across their enterprises to make better business decisions. Companies choose MicroStrategy BI for its ease-of-use, sophisticated analytics, and superior data and user scalability. The MicroStrategy BI platform delivers actionable information to business users via the web and mobile devices. MicroStrategy's mobile intelligence platform helps companies and organizations build, deploy, and maintain mobile apps across a range of solutions by embedding intelligence, transactions, and multimedia into apps. MicroStrategy's social intelligence platform includes a number of applications that help enterprises harness the power of social networks for marketing and e-commerce, as well as a suite of free consumer friendly apps that use MicroStrategy's enterprise technologies. MicroStrategy's social intelligence platform helps companies leverage the value of social networks to better understand and engage their customers and fans. The MicroStrategy Cloud offering combines MicroStrategy and third-party software, hardware, and services to enable rapid, cost-effective development of hosted BI, mobile, and social applications.

Insider sells

Michael Saylor sold 42,300 shares on August 28-29. Michael Saylor has served as chief executive officer and chairman of the Board of Directors since founding MicroStrategy in November 1989, and as president from November 1989 to November 2000 and since January 2005.

Financials

The company reported the second-quarter financial results on July 30 with the following highlights:

Revenue$141.8 million
Net income$7.3 million
Cash$195.5 million

My analysis

The stock has a $166 price target from the Point and Figure chart. The stock has seen steady insider selling since May 2011. There has not been any insider buying since at least May 2011. The stock is currently trading at a forward P/E of 28.27. I am not interested in shorting the stock before the $166 level.

5. Teradata Corporation (NYSE:TDC) is the world's leading analytic data solutions company, focused on integrated data warehousing, big data analytics, and business applications. Teradata's innovative products and services deliver data integration and business insight to empower organizations to make the best decisions possible for competitive advantage.

Insider sells

Victor Lund sold 62,388 shares on August 28. Victor Lund serves as a director of the company.

Financials

The company reported the second-quarter financial results on August 2 with the following highlights:

Revenue$665 million
Net income$112 million
Cash$821 million

Outlook

Terradata provided the following outlook on August 2:

Teradata is raising its expectations for constant currency revenue growth from the 13-15 percent revenue range to the 14-16 percent range. However, due to currency changes since early May 2012, when Teradata previously provided revenue guidance, Teradata now anticipates that currency translation will negatively impact the year-over-year revenue comparison by an additional percentage point, based on currency rates on July 30, 2012. As a result Teradata's expectation for 2012 full-year reported revenue growth remains at 12-14 percent.

Teradata is increasing its guidance for 2012 GAAP earnings per share to the range of $2.34 to $2.44. Excluding stock-based compensation expense and special items, non-GAAP EPS for 2012 is now expected to increase to the range of $2.72 to $2.82, versus prior non-GAAP EPS guidance of $2.60 to $2.70.

My analysis

The stock has a $102 price target from the Point and Figure chart. The stock has seen steady insider selling since February 2012. There has not been any insider buying since February 2012. The stock is currently trading at a forward P/E of 23.98. I am not interested in shorting the stock before the $102 level.

Source: Top 5 Insider Sells Filed On August 30