Few Insiders Selling Stock as Market Volatility Spikes Higher

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.

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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.

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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