Few Insiders Selling Stock as Market Volatility Spikes Higher

Investing

Published: January 31, 2015 9:15 am

Nothing gets insiders and owners of stock a little nervous more than markets trading near all-time highs, and volatility starting to rear its very potentially nasty head. With oil continuing to plunge and gross domestic product coming in far lower than expected, January is finishing the month on a pretty sour note, and insiders may be taking notice.

We cover insider selling every week here at 24/7 Wall St., and we like to remind readers that insiders selling stock is not always a negative. Many times executives are diversifying, and 10% institutional owners may have owned shares for years. One thing for shareholders to look for is insiders selling at the bottom. That can be a warning flag.

Here are companies that saw insiders selling this past week.

Charles Schwab Corp. (NYSE: SCHW) saw a very influential owner sell more stock. The iconic founder of the discount brokerage, Charles Schwab, sold another 277,209 shares of the company this week. The price range was $27.00 to $27.31, and the total sale came to a very tidy $7.5 million. He is picking up where he left off last year, when he appeared on this insider buying report numerous times. The stock was trading on at $25.98 on Friday’s close, so a well-timed transaction indeed.

ALSO READ: Is the Stock Market Correction Taking Hold?

Discover Financial Services (NYSE: DFS) had three top company executives sell stock recently. The chief financial officer and two executive vice presidents sold a total of 99,177 shares at prices that ranged from $56.33 to $56.65. The total sale came to $5.6 million. These sales follow a recent steep decline in the stock. Shareholders may want to revisit the thesis for owning now. Shares ended the week at $54.38.

Capital Southwest Corp. (NASDAQ: CSWC) had a director of the company decide to sell some stock. That director parted with a 120,000 share block at $43.04, for a total sale of $5.2 million. This is a business development company specializing in private equity investments in growth capital, acquisition financings, management buyouts and minority recapitalizations. The stock closed trading Friday at $43.51.

Groupon Inc. (NASDAQ: GRPN) saw a director of the online coupon company sell a block of 500,000 shares of stock. The shares hit the tape at prices between $5.96 and $6.08. The total sale came to $3.6 million. Shares closed Friday at $7.16, so some substantial money was left on the table.

ALSO READ: Volatile Market Week Doesn’t Stop Insiders From Buying Stock

Typically we see much larger insider selling on a normal trading week. One explanation is that many insiders are prohibited from selling during a window around the company’s earnings. Given that earnings season is just beginning to wind down, that could account for the limited activity

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