Applied Materials Inc. (AMAT), Cisco Systems Inc. (CSCO), and Emcor Group Inc. (EME) See Executives and Board Members Unload Shares

Investors closely monitoring insider trading activity on a daily basis have surely noticed that Facebook Inc. (NASDAQ:FB) and The Coca-Cola Co (NYSE:KO) have dominated the insider selling activity of the past several trading sessions. But why doesn’t Insider Monkey cover that seemingly noteworthy insider selling activity?

Insider Monkey readers most probably know that our team ignores all kinds of insider trading activity related to pre-arranged trading plans, usually referred to as 10b5-1 plans, or activity associated with freshly-exercised stock options. Investors are well aware that corporate insiders sell shares for a wide variety of reasons unrelated to their companies’ current market conditions or future prospects, so Insider Monkey attempts to keep tabs on the informative kind of insider selling only by focusing on spur-of-the-moment transactions. Are those insider sales conducted under pre-arranged trading plans put in place months ago relevant to current market conditions? Highly unlikely. Even spontaneous insider sales unrelated to stock options may not convey any information, as insiders may simply sell shares for liquidity needs, so Insider Monkey tries to minimize the risk of stumbling upon erroneous-signaling insider selling. That said, the following article will discuss the recent insider selling registered at three publicly traded companies.

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Networking Giant Cisco Registers Increased Insider Selling

The insider selling activity at Cisco Systems Inc. (NASDAQ:CSCO) has been intense in recent months, so let’s take a look at the most recent activity. Pankaj Patel, the company’s Chief Development Officer and Executive Vice President, offloaded 35,445 shares on Monday and 14,942 shares on Tuesday at a weighted average price of $28.98 per share. A total of 20,760 shares of the freshly-sold securities were held in a trust fund called Trust #1 that continues to hold 144,165 shares, while 22,956 shares were held in another trust named Trust #3 that currently owns a mere 5,412 shares. The remaining 5,671 shares were owned directly. After the recent sales, Mr. Patel, who is leaving the company in the second half of the year after spending 19 years at Cisco, currently holds a direct ownership stake of 357,636 shares.

Just recently, analysts at Goldman Sachs downgraded the networking giant to “Neutral” from “Buy”, saying that the company is “running out of levers to drive meaningful upside”. The investment bank’s price target on Cisco Systems Inc. (NASDAQ:CSCO) was cut to $32 from $35, which reflected slowing server share gains and operating margins near 10-year highs. Moreover, the stock’s multiple expansion is anticipated to be weighted by increasing competition from Hewlett Packard Enterprise Co (NYSE:HPE)’s Aruba networking products, as well as recent departures of key executives such as the one of Mr. Patel. Cisco shares are up 5% year-to-date. Donald Yacktman’s Yacktman Asset Management was the owner of 29.33 million shares of Cisco Systems Inc. (NASDAQ:CSCO) at the end of March.

The second page of this article will discuss the recent insider selling recorded at two other companies.

Electrical and Mechanical Construction and Facilities Services Firm Has Board Member Sell Shares

Emcor Group Inc. (NYSE:EME) also had one of corporate insider sell big earlier this week. Board member Michael T. Yonker sold an aggregate of 10,833 shares on Tuesday through a series of transactions at prices varying from $48.55 to $48.69 per share. After the recent sales, Mr. Yonker continues to hold an ownership stake of 45,024 shares.

The shares of the U.S. electrical and mechanical construction and facilities services firm are up less than 1% since the beginning of 2016. Emcor Group Inc. (NYSE:EME)’s worldwide revenues were $1.74 billion in the first quarter of 2016, up from $1.59 billion reported for the same period of the prior year. The increase in the company’s top line was mainly driven by increased revenues from its two domestic construction segments, namely the U.S. electrical construction and facilities service segment and the U.S. mechanical construction and facilities services segment, as well as increased demand for industrial field services. Emcor Group’s bottom line grew to $34.35 million from $32.85 million posted a year ago.

Emcor shares are currently changing hands at around 14.8-times expected earnings, below the forward PE multiple of 15.8 for the industrials sector. The number of asset managers followed by Insider Monkey with stakes in the company climbed to 21 from 19 during the March quarter, with the 21 money managers amassing nearly 5% of the company’s outstanding shares. Royce & Associates, founded by Chuck Royce, trimmed its position in Emcor Group Inc. (NYSE:EME) by 22% during the first quarter to 1.17 million shares.

Strong Performing Semiconductor Maker Sees Executive Offload Shares

Last but certainly not least, Applied Materials Inc. (NASDAQ:AMAT) saw a member of its executive team sell some shares earlier this week. Ali Salehpour, Senior Vice President and General Manager of the New Markets and Service Group at Applied Materials, discarded a block of 17,752 units of common stock on Monday and another one with the same amount of units two days later at prices ranging from $23.87 to $24.00 per unit. After the recent transactions, Mr. Salehpour continues to own a stake of 513,443 shares, which includes 401,307 performance shares.

The provider of manufacturing equipment, services and software to the global semiconductor, display, solar photovoltaic and other related industries has seen its market value jump by 28% since the start of 2016. Earlier this week, analysts at boutique investment bank KeyBanc Capital Markets raised their price target on Applied Materials Inc. (NASDAQ:AMAT) while reiterating their “Overweight” rating on the stock, saying that the semiconductor maker is “gaining etch market share with the industry transition to 3D NAND, which should drive its overall etch share to over 20% this year (versus ~18% last year)”. Just recently, the company’s boardroom approved a quarterly dividend of $0.10 per share, which yields 1.67% annually.

There were 39 hedge fund vehicles from our system with equity stakes in the semiconductor equipment maker at the end of the March quarter, down from 41 funds registered at the end of the previous quarter. Roughly 4% of the company’s outstanding common stock was amassed by the funds tracked by our team. John A. Levin’s Levin Capital Strategies has 5.32 million shares of Applied Materials Inc. (NASDAQ:AMAT) in its portfolio as of the end of March.

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