Insiders reported on Friday that they bought and sold stock in over 500 separate transactions in over 250 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime last week. We culled through these 500 or so insider buys and sells (based on SEC Forms 3, 4, and 5 filings), as part of our daily and weekly coverage of insider trades, and present here the most notable trades reported on Friday in the technology and healthcare sectors. 'Notable' based on the dollar amount sold, the number of insiders selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock:
Qualcomm Inc. (NASDAQ:QCOM): Qualcomm is a designer of CDMA-based, RF and power management ICs for system software used in wireless handsets, modem cards and networks. On Friday, these four insiders sold shares: Chairman & CEO Paul Jacobs (30,034 shares), Vice Chairman Steven Altman (50,000 shares), EVP Margaret Johnson (30,000 shares), and EVP James Lederer (20,687 shares). The executives filed SEC Forms 4 indicating that they sold a total of 130,721 shares for $7.8 million, all under 10b5-1 plans, and with most of the shares sold acquired as a result of exercising options. Just last week on Wednesday, Qualcomm reported an outstanding Q4, beating revenue ($4.68 billion v/s $4.58 billion) and earnings (97c v/s 90c) estimates, and guiding next quarter revenues and earnings higher. The stock has broken out of a long-term consolidation pattern and trades at almost twelve-year highs, at 14-15 forward P/E and 3.8 P/B compared to averages of 39.0 and 3.3 for its peers in the wireless equipment group.
Broadcom Corp. (BRCM): Broadcom provides a portfolio of system-on-a-chip (SoC) and software solutions for wired and wireless communications to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. On Friday, three insiders filed SEC Forms 4 indicating that they sold a total of 204,916 shares for $7.3 million, all pursuant to 10b5-1 plans. The majority of these shares (200,000) were sold by Chief Technical Officer Henry Samueli, that he acquired by converting Class B common stock to Class A common stock. Overall, insiders sold a total of 1.4 million shares in the past year. Just last week on Tuesday, Broadcom reported beating analyst revenue ($1.82 billion v/s $1.8 billion) and earnings (68c v/s 65c) estimates; the stock has moved higher following the report, and it currently trades at a discount 12-13 forward P/E compared to the 14.4 average for its peers in the communications semiconductor group, while earnings are projected to rise slightly from $2.89 in 2011 to $3.04 in 2013.
Seagate Technology (NASDAQ:STX): Seagate manufactures hard disk drives for the enterprise, desktop, mobile computing, and consumer electronics markets. On Friday, six insiders filed SEC Forms 4 indicating that they sold a total of 0.74 million shares for $17.9 million, with the majority sold pursuant to 10b5-1 plans. The large majority (520,000 shares) were sold by Chairman & CEO Stephen Luczo, all pursuant to 10b5-1 plans, with 20,000 of those shares acquired by the exercise of options. EVP William Mosley accounted for the second largest sale of 100,000 shares, pursuant to a 10b5-1 plan, and that were all acquired as a result of the exercise of options. Insiders have been aggressively selling Seagate recently, including 1.4 million shares that were reported in SEC Form 4 filings just earlier this week (including the one we reported earlier for Tuesday), and a total of over 2.6 million shares reported so far YTD (in just over a month). In comparison, insiders sold a total of 5.4 million shares in the past year. Just this week on Tuesday, Seagate reported a stellar Q4, obliterating analyst earnings estimates ($1.32 v/s $1.08) and giving strong guidance on revenue and gross margin for the next quarter and full year. The stock currently trades at a very cheap 3-4 forward P/E, while earnings are projected to rocket up from $1.24 in 2011 to $6.10 in 2012 and $8.28 in 2013.
Alkermes Plc (NASDAQ:ALKS): Alkermes, an integrated biotech company, develops injectable and oral products for the treatment of central nervous system ((NYSE:CNS)) disorders, addiction, diabetes and autoimmune disorders. On Friday, four insiders filed SEC Forms 4 indicating that they exercised options and sold the resulting total of 87,500 shares for $1.7 million, all pursuant to 10b5-1 plans. The large majority of the sales were by CEO Richard Pops (60,000 shares). The other insiders selling were CFO James Frates (10,000 shares), SVP Michael Landine (12,500 shares) and Director Robert Breyer (5,000 shares). Overall, insiders sold only an additional 0.21 million shares in the past year. Alkermes reported its Q4 on Friday. It beat revenues and earnings estimates, with revenues continuing to be on a strong growth trajectory, up 74% quarter-over-quarter, and up 185% year-over-year, while also continuing to post losses. Analysts continue to project strong revenue growth going forward, with another 33% growth from FY ending March 2012 to FY 2013. The stock trades at 6.0 times annual revenue on a TTM basis compared to the average of 235.7 for the biotech group.
Johnson & Johnson (NYSE:JNJ): Johnson & Johnson develops health care products and provides related services to the consumer, pharmaceutical and medical markets. On Friday, two insiders, Chairman/CEO William Weldon (448,085 shares) and VP Russell Deyo (15,000 shares) filed SEC Forms 4 indicating that they sold a total of 463,085 shares for $30.6 million. All shares sold by Mr. Weldon and 1,700 of the shares sold by Mr. Deyo were acquired after exercising stock options. Overall, insiders sold a total of 1.3 million shares in the past year. Johnson & Johnson trades at a premium 12 forward P/E compared to the 11.3 average for the group, and it has a dividend yield of 3.5%. The stock is currently approaching the top of its long-term trading range in the $70 range.
On top of these, some additional large insider trades on Friday in the healthcare and technology sectors included:
By Chairman & CEO Jerry Kennelly at wide-area network (WAN) optimization solutions provider Riverbed Technology Inc. (NASDAQ:RVBD).
A $1.7 million sale by three insiders, all pursuant to 10b5-1 plans, at Fortinet Inc. (NASDAQ:FTNT), a provider of network security appliances and unified threat management systems for enterprises, service provider and government entities worldwide.
A $1.0 million sale, pursuant to a 10b5-1 plan, by SVP Seth Hoogasian at Thermo Fisher Scientific (NYSE:TMO), a provider of analytical instruments, equipment, reagents and consumables, software, and services for research, manufacture, discovery and diagnostics.
Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I am long STX.
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