Inspiration is a guest that does not willingly visit the lazy.” ― Tchaikovsky
Recently, we started a weekly feature around five stocks insiders are buying. While not as powerful an indicator as insider buying, as insiders sell for many reasons (to cover taxes, divorce, diversification, options expiration, etc.) However, insider sells are one thing I do look at when analyzing an individual stock.
Therefore, we will have a weekly feature covering five stocks that are seeing substantial and recent insider selling going forward.
Let's start with Planet Fitness (PLNT). Both the CEO and President/CFO are taking some significant chips off the table in March after that stock's recent rally. So far in March, the CEO has sold over $20 million in stock, and the CFO has disposed of over $6 million in equity.
The company slightly beat Q4 expectations on the top and bottom line late in February and also forecasted 15% revenue growth in FY2019. The consensus has earnings rising some 20% this year as well. That said, the shares sell for over 40 times this year's EPS projections. Current analyst price targets range from $55 to $70 a share. Insiders might be signalling it might be time to take some profits in this name.
Next up is Square (SQ) where founder and CEO Jack Dorsey continues to liquidate shares. He has sold off over $15 million in share so far in March and ever larger sales in January and February of this year. The Chief Accounting Officer at the firm also sold more than $350,000 in equity on February 28th and March 4th.
The stock has held up well despite forward guidance did not meet consensus when the company reported Q4 results on February 27th. Six analyst firms, including Wedbush, Jefferies, and Piper Jaffray have issued 'Hold' ratings on the stock since those quarterly numbers were released. Insiders don't seem to signalling the shares are undervalued with their actions here in March.
The shares of Stitch Fix (SFIX) rose some 20% directly after better-than-expected fourth quarter results were posted on March 11th. This triggered several analyst firms to hike price targets on this online retailer. Stitch Fix sells a range of apparel, shoes, and accessories through its Website and mobile app in the United States.
Insiders are using the recent rally to lighten up their stakes in the firm. The CFO sold just over $1.4 million in shares on March 12th. The company's Chief Legal Officer also disposed of just over 10,000 shares on that day as well. This follows over $3 million in insider sales by the CEO in February. The COO at Stitch Fix also liquidated over $600,000 in shares last month as well. A March 13th article on Seeking Alpha also advised to use the post-earnings rally to take profits on this name.
Commercial real estate services and investment company CBRE Group (CBRE) sees its first significant insider selling in quite some time. The stock has had a big run so far in 2019. The company beat the top and bottom line consensus when it reported Q4 results on February 13th and is moving into the co-working space, WeWork. The company also disclosed a better-than-expected forecast for 2019 earlier this month.
Insiders are taking advantage of this year's rally in the stock to cash in some chips. Four officers, including the CFO, sold over $5 million in shares in aggregate in CBRE on March 11th. Merrill Lynch, UBS, and JMP Securities have also reissued Hold or Neutral ratings within the past two weeks.
Finally, we have uniQure (QURE). The stock of this Netherlands-based gene therapy concern has more than doubled so far in 2019. In January, the FDA accepted its IND application for drug candidate 'AMT-130' for the treatment of Huntington’s Disease. The company also presented updated data from an open-label single-arm Phase 2b clinical trial evaluating gene therapy AMT-061 in patients with severe and moderately severe hemophilia B in early February.
Finally, Roche's (OTCQX:RHHBY) $5 billion buyout of Spark Therapeutics (ONCE), including a large buyout premium in late February, triggered a rally in most gene therapy plays. The rise in the shares has led the CEO/CFO to cash in approximately $4 million of his shares at 52-week highs over the past few days via a half dozen transactions. It should be noted that this amounts to just under 10% of his overall stake in the firm.
And, those are five notable names seeing significant insider selling in recent trading sessions.
Progress isn't made by early risers. It's made by lazy men trying to find easier ways to do something.” - Robert Heinlein
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Disclosure: I am/we are long QURE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.