Apple Inc. (AAPL) Supplier Among 3 Hot Stocks to Witness Insider Selling

American Electric Power Company Inc. (NYSE:AEP) is another company that had an insider sell stock this week. Director Lionel L. Nowell III sold out his entire stake of 8,209 shares on Tuesday for exactly $62 each, which might suggest that the stock hit a technical level which automatically triggered the sale of the entire position. The utility company has seen its shares advance by more than 8% thus far in 2016 and is closing in on its 52-week high, which somewhat justifies the Director’s sale given the high volatility and increased concerns in the market.

Just recently, the provider of electricity released its fourth-quarter earnings report, which was received very well by the market despite missing both top- and bottom-line estimates. American Electric Power Company reported revenue of $16.5 billion for 2015, up from $16.4 billion reported a year earlier. At the same time, the company’s GAAP earnings for 2015 reached $2.05 billion or $4.17 per share, compared to $1.63 billion or $3.34 per share reported for 2014. Meanwhile, the stock trades at a forward price-to-earnings ratio of 16.18, which is slightly above the ratio of 15.2 for the electric utilities industry. Therefore, the Director’s recent sale appears to be quite well-timed if bearing in mind the increased worries about a potential U.S recession. There were 29 smart money investors from our database with positions in the company at the end of September, stockpiling nearly 3% of its outstanding shares. Israel Englander’s Millennium Management is the owner of 5.95 million shares of American Electric Power Company Inc. (NYSE:AEP) as of September 30.

Cirrus Logic Inc. (NASDAQ:CRUS) is another strong performer in 2016 that witnessed recent insider selling. Scott A. Anderson, Senior Vice President and General Manager-Mixed Signal Audio Division, unloaded 12,713 shares on Monday at prices that ranged from $35.22 to $35.29 per share, trimming his stake to 16,966 shares. The stock of the developer of high-precision, analog and mixed-signal integrated circuits (ICs) is up by almost 14% so far in 2016, and by 20% over the past 12 months. The company supplies Apple Inc. (NASDAQ:AAPL) with audio chips, which accounted for 76% of Cirrus Logic’s net sales for the third quarter of fiscal year 2016. Cirrus generated 67% of net sales for the first nine months of fiscal year 2016 that ended December 26 from Apple and 15% from Samsung Electronics. The company’s net sales for that period totaled $937.3 million, marking an increase of 42% year-over-year. Furthermore, net sales from portable audio products grew by 51% year-over-year due to sustained organic growth in portable products. It should also be noted that the stock trades at a forward P/E multiple of 11.82, which is well below the average of 15.89 for the companies included in the S&P 500. Most importantly, the company’s gross margin increased in the third quarter of fiscal year 2016 to 47.4%, from 43.8% registered a year earlier. 30 smart money investors tracked by our team were invested in Cirrus Logic at the end of the third quarter, owning nearly 12% of the company’s total shares. Joel Greenblatt’s Gotham Asset Management owned 1.14 million shares of Cirrus Logic Inc. (NASDAQ:CRUS) at the end of September.

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