Do These Selling Insiders Know Something You Don’t?

There has also been a high volume of insider selling registered at Sportsman’s Warehouse Holdings Inc. (NASDAQ:SPWH) this year, but a large portion of those sales were conducted under trading plans. Chief Financial Officer and Secretary Kevan P. Talbot reported selling 9,869 shares on Thursday and 3,731 shares on Friday, at prices that ranged from $12.75 to $13.00 per share, all of which were held by Pit Stop Properties LLC. The CFO, through his revocable trust, and his wife, through her revocable trust, are the sole general members of Pit Stop Properties LLC. After the recent sales, Pit Stop Properties holds a stake of 46,400 shares. The CFO also holds an indirect ownership stake of 374,307 shares, which are held through the Kevan P. Talbot Revocable Trust.

The operator of retail sporting goods stores has seen its shares advance by 100% over the last year, so it should not be surprising that insiders are cashing out. The recent insider selling does not necessarily mean that the stock will embark on a steady downtrend in the future, but this is how contrarian investors think: sell when everyone wants the stock, and buy when no one wants the stock. Sportsman’s Warehouse trades at a forward P/E ratio of 16.98, which is slightly above the average for the S&P 500 companies. Considering that the company’s same-store sales for the first nine months of fiscal year 2015 were flat relative to the same period of the prior year, one could argue that there is not much upside for the company. Ken Griffin’s Citadel Advisors LLC acquired a 377,852-share stake in Sportsman’s Warehouse Holdings Inc. (NASDAQ:SPWH) during the September quarter.

Disclosure: None