Technology Sector: Insider Buy And Sell SEC Filings From Last Week's Big Movers

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Includes: AAPL, CIEN, DVMT, GOOG, INTC, QCOM, TIBX
by: GuruFundPicks

During the past week, corporate insiders traded a number of high profile technology stocks, including Google, Inc. (NASDAQ:GOOG) and EMC Corp. (EMC). Many of these were regular trades in the open market, and others were automatic trades made under SEC Rule 10b5-1. It is generally believed that regular insider share purchases and sales in the open market carry more predictive value as they are made voluntarily by the insiders. Conversely, trades made under SEC Rule 10b5-1, called “Automatic Buys” and “Automatic Sells”, are part of a pre-determined plan or contract, and it is assumed that the plan was created before the insider had any privileged non-public information.

While insiders are prohibited from trading based on nonpublic information, most believe that such trading does occur around the edges. The thinking goes that corporate insiders, because of their access, have the most up-to-date information on the health of their companies and the industries they operate in. Investors, as a result, can benefit from the timely knowledge of insider transactions. In fact, one University of Michigan study found that when executives bought shares in their own companies, the stocks tended to outperform the total market by 8.9% over the next 12 months. Conversely, when they sold shares, the stock underperformed by 5.4%.

Furthermore, even automated trades made under 10b5-1 have some predictive value due to loopholes in the rule that, for example, allow the insider to cancel the trading plan without any penalty or legal liability. So, the insider could set up a 10b5-1 trading plan before they have inside information (for example, from a quarterly report and guidance) while retaining the option to later cancel the plan based on the inside information. So, in effect, the execution of an automated trade also carries some predictive value as insiders retain the option under the existing rules to cancel their trades without penalty or legal liability.

Insider trading as defined here (and by the SEC) includes not just corporate insiders such as company executives and key employees, but also directors and large shareholders that have access to non-public information. Large shareholders are defined by the SEC for this purpose are those that having beneficial ownership of ten percent of more of the firm’s equity securities (including institutional investors). Furthermore, like in the 13-D and 13-G filings for Institutions, the SEC Forms 3 and 4 on insider filings are extremely timely, and hence of greater significance, as they must be reported within two business days of the trade.

The following is our summary of the most recent major insider filings in the technology sector during the last week:

EMC Corp. (EMC): EMC develops, delivers and supports information and virtual infrastructure technologies and solutions, and offers enterprise storage systems and software which are deployed in storage area networks (SAN) and network attached storage (NAS). Insiders currently hold 0.8% of company shares, and during the last week, six insiders sold in the open market (with some after exercising their options) a total of 647,973 shares for $15.6 million, or 3.53% of the total number of shares held (directly and indirectly) by insiders. This included CEO Joseph Tucci, CFO David Goulden, COO Elias Howard, Vice Chairman William Tueber, EVP Harry You, and Director Gail Deegan. During the past year, 54 EMC insiders have sold a total 5.5 million shares or 23.1% of the total number of shares held by insiders. No insiders bought EMC stock in the last year.

Ciena Corp. (NASDAQ:CIEN): Ciena is a designer of Ethernet transport and switching systems used in network infrastructure by telecom and cable service providers. Insiders currently hold 4.7% of company shares, and during the last week, CTO Alexander Stephen sold in the open market 3,500 shares or 0.08% of the total number of shares held (directly and indirectly) by insiders. During the past year, 85 Ciena insiders have sold a total 0.57 million shares or 11.5% of the total number of shares held by insiders. No insiders bought CIEN stock in the last year.

Google Inc. (GOOG): Google is the Internet’s premier search engine. Insiders currently hold 0.9% of company shares, and during the last week, Sr. VP and Chief Business Officer Nikesh Arora sold in the open market 2,266 shares at $1.4 million, or 0.05% of the total number of shares held (directly and indirectly) by insiders. During the past year, 147 Google insiders have sold a total 2.49 million shares or 39.0% of the total number of shares held by insiders. No insiders bought GOOG stock in the last year.

Tibco Software (NASDAQ:TIBX): Tibco provides business application and database integration, process automation, management and optimization software. Insiders currently hold 3.7% of company shares, and during the last weeks, two insiders sold in the open market, and another two insiders exercised their options and sold (“Automatic Sell”) the resulting shares under 10b5-1 plans. The total shares sold were 105,149 or 0.40% of shares held (directly and indirectly) by insiders. This included CFO Carey Sydney and EVP, and General Counsel & Secretary William Hughes that sold their shares in the open market; and COO Murray Rode, and EVP, Products and Engineering, Thomas Laffey that exercised their options and sold the resulting shares (under 10b5-1 plans). During the past year, 33 insiders sold a total of 1.18 million shares or 4.34% of the total number of shares held by insiders. No insider bought TIBX stock in the last year.

Intel Corp. (NASDAQ:INTC): Intel is one of the world’s largest manufacturers of semiconductor chips, including microprocessors, chipsets, network processors, motherboards, non-volatile memory and storage. Its products are used in notebooks, netbooks, desktops, servers, workstations, storage products, embedded applications, communications products, consumer electronics devices, and handhelds. Insiders currently hold 0.33% of company shares, and during the last week, two insiders exercised their options and sold (“Automatic Sell”) the resulting total 153,476 shares or 0.07% of shares held (directly and indirectly) by insiders under 10b5-1 plans. This included Thomas Kilroy, Sr. VP and GM of Sales and Marketing Group; and William Holt, Sr. VP and GM of Tech and Manufacturing Group. During the past year, nine insiders at Intel have sold a total 439,389 shares or 0.20% of the total number of shares held by insiders. No insiders bought INTC stock in the last year.

Apple Inc. (NASDAQ:AAPL): Apple is one of the world’s largest manufacturers of personal computers, mobile communication devices, and portable digital music players. Insiders currently hold 0.75% of company shares, and during the last week, three insiders exercised their options and sold (“Automatic Sell”) the resulting total 28,236 shares or 0.42% of shares held (directly and indirectly) by insiders. This included William Jeffrey, Sr. VP of Operations, Eduardo Cue, Sr. VP, Internet Software & Services, and Betsy Rafael, VP and Corporate Controller. During the past year, 32 insiders sold a total of 400,564 shares or 5.64% of the total number of shares held by insiders. No insider bought AAPL stock in the last year.

Qualcomm Inc. (NASDAQ:QCOM): Qualcomm is a designer of CDMA-based, RF, and power management IC's for system software used in wireless handsets, modem cards, and networks. Insiders currently hold 0.07% of company shares, and during the last week, EVP Margaret Johnson exercised her options and sold (“Automatic Sell”) the resulting 20,000 shares or 0.08% of shares held (directly and indirectly) by insiders. During the past year, 186 insiders sold a total 10.43 million shares or 29.65% of the total number of shares held by insiders. Only three insiders bought a total 200,200 QCOM stock in the last year.

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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