Investing

Insider Selling Wanes as Volatility Spikes

With multiple days of triple-digit up and down moves, the market volatility was all over the place this past week. After seeing insider selling really jump for most of the past four weeks, things have really quieted down. This may reflect the fact that many have tapped out their window for selling stock after earnings season ended, or it could mean that insiders may think that the market will continue to rally into April. Whatever the reason, things really slowed down.

We cover insider selling every week at 24/7 Wall St., and we like to remind our readers that insider selling in of itself is not necessarily bad. Many executives and directors are compensated via corporate stock and stock options. They often sell for diversification and tax reasons. When we spot insiders unloading stock of a troubled company, we point it out.

Here are the companies that reported insider selling this past week.

Walt Disney Co. (NYSE: DIS) has been on a huge roll, so it is no surprise to see some insider selling here. The chief financial officer of the entertainment giant sold a block of 115,000 shares at $106.72 apiece. The total came to $12.2 million. The stock was trading at Friday’s closing bell at $108.43.

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Dollar General Corp. (NYSE: DG) has also been on a significant roll, and its chief financial officer thought it was time to cash in some stock. David Tehle sold a large block of 75,412 shares of the discount retailer at prices that ranged from $75.20 to $75.43. The total for the sell came to a sizable $5.7 million. The stock ended trading on Friday at $75.78.

Medical Properties Trust Inc. (NYSE: MPW) is a medical real estate investment trust (REIT) that has done well this year. The chief executive of the company took advantage of a recent uptick in the stock and sold shares. Edward Aldag parted with a whopping 204,156 shares at $14.46 to $14.48 per share. That netted him a very tidy $3 million. Shares closed trading on Friday at $15.22, so he left a little on the table.

Lannett Co. Inc. (NYSE: LCI) had a C suite executive sell a large block of stock. The chief operating officer of the company sold 134,635 shares at $64.99 apiece. The total of the sale came to $8.8 million. Lannett develops, manufactures, packages, markets and distributes generic versions of branded pharmaceutical products in the United States. It offers solid oral, extended release, topical and oral solution finished dosage forms of drugs that address a range of therapeutic areas. The shares ended the week at $68.57, so a significant amount left on the table in this case.

Mohawk Industries Inc. (NYSE: MHK) has been a very strong stock the past two years, and the maker of carpet and other flooring products had a family trust member sell stock last week. The 33,900 shares of the stock sold at prices that ranged from $177.80 to $179.36, and the total came to $6 million. The stock closed trading Friday at $181.03.

Bank of the Ozarks Inc. (NASDAQ: OZRK) had a director of the regional bank sell shares this past week. That director hit the bid on 75,400 shares of stock at $37.20. The total for the sale came to $2.8 million. We have noted other sellers from the bank in the past six months, but they all waited as the stock came way off of last year’s lows, so that is positive for shareholders. The stock was trading at $37.82 on Friday’s close.

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These companies also reported insider selling last week: Boston Beer Co. Inc. (NYSE: SAM), East West Bancorp Inc. (NASDAQ: EWBC), FactSet Research Systems Inc. (NYSE: FDS), Roper Industries Inc. (NYSE: ROP) and TCF Financial Inc. (NYSE: TCB).

With insider selling reasonably light, that indicates that many executives may feel the stock at the companies they work for could be going higher. Overall, it is a bullish signal to see selling this light after such a huge market advance.

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