Corporate Insiders Are Fleeing These Three Stocks, Should Investors Follow Suit?

The CEO of This Diversified Manufacturer Caught Selling Shares

Leggett & Platt Inc. (NYSE:LEG) saw its most influential executive sell shares on the last trading session of last week. President and CEO Karl G. Glassman sold 22,580 shares on Friday at $50.07 apiece, cutting his direct ownership stake to 475,936 shares. Mr. Glassman also holds an indirect ownership stake of 19,943 shares, which is held in a trust fund under the company’s retirement plan.

The diversified manufacturer that designs and produces a large array of engineered components and products found in homes, offices, automobiles, and commercial airplanes has seen its market value gain an impressive 20% since the beginning of the year. Leggett & Platt Inc. (NYSE:LEG)’s business operations are divided into 17 different business units in four segments, which include residential furnishings, commercial products, industrial materials, and specialized products. In mid-May, the company announced a second-quarter dividend of $0.34 per share, higher than the dividend of $0.32 per share paid in the first quarter. The stock sports an annual dividend yield of 2.70%, which is one of the highest yields among the pool of Dividend Aristocrats in the S&P 500 Index. Leggett & Platt has increased its annual dividend payment for 45 straight years at an average compound growth rate of 13%, so the company’s is on track to join the exclusive list of Dividend Kings.

The number of asset managers monitored by our team with stakes in the diversified manufacturer climbed to 19 from 17 during the first three months of 2016. Ken Griffin’s Citadel Advisors LLC had nearly 660,000 shares of Leggett & Platt Inc. (NYSE:LEG) in its portfolio on March 31.

Successful Dining Chain Has One Executive Offload Shares

Denny’s Corporation (NASDAQ:DENN) had one of its executives sell shares this past week. Stephen C. Dunn, Senior Vice President and Chief Global Development Officer, discarded an aggregate of 12,500 shares on Friday at a weighted average price of $10.81 per share. Following the Friday sales, Mr. Dunn continues to hold an ownership stake of 81,797 shares.

The full-service restaurant chain, usually referred to as “America’s diner”, has seen its shares advance by 67% in the past two years and 11% in 2016 alone. The strong performance could be attributed to Denny’s Corporation (NASDAQ:DENN)’s multi-year remodeling process, which has triggered a turnaround at the casual dining chain. Denny’s kicked off its “Heritage” reimage program several years ago, with the company converting roughly 36% of its restaurants to the so-called Heritage image. The company has 1,713 restaurants operating, of which 1,551 were franchised or licensed. Denny’s company restaurant sales grew by 5.1% year-over-year in the first three months of 2016 to $90.39 million, which reflects a 3.5% increase in same-store sales and an increase in the number of company restaurants.

There were 17 asset managers from our system with long positions in the diner chain at the end of March, as compared to 20 registered at the end of December. Those 17 money managers amassed nearly 11% of the company’s total number of outstanding common stock. Jim Simons’ Renaissance Technologies LLC had 3.86 million shares of Denny’s Corporation (NASDAQ:DENN) among its holdings at the end of the first quarter.

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