It has been proven that insider purchases and sales are fairly accurate predictors of future stock performance. Considering the fact that insiders might have access to important information which might not be available to the public, it makes a lot of sense to track insider activities when making investment decisions. It is generally believed that insider purchases bear more information than insider selling, as corporate insiders can sell shares for a variety of reasons not related to the performance of the company. However, when insiders start unloading significant portions of their stakes at a high pace, current and potential investors should be ready to act accordingly, as the company might face some issues along its way. From time to time, insider selling might raise red flags and investors should be ready to identify them. In this article we will be discussing three companies that had a large volume of insider selling on Wednesday. These companies are Salesforce.com inc. (NYSE:CRM), ServiceNow Inc. (NYSE:NOW) and Republic Services Inc. (NYSE:RSG).
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At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 123% and beating the market by more than 66 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Salesforce.com inc. (NYSE:CRM) has seen massive insider selling activity recently. Marc Benioff, who is the chairman and CEO of Salesforce, has been unloading his holding in the company at a high pace lately, selling 37,500 shares since the beginning of the current week. In addition to that, Parker Harris, one of the co-founders of Salesforce, has also sold 5,000 shares at prices of $72.42 and $73.50. Let’s not forget to mention the sell-off of 3,976 shares by Maria Martinez, who heads the teams that are actively engaged with Salesforce’s customers. The shares of the cloud computing company have grown by nearly 24% year-to-date and there are no signs that the company faces any troubles along its way. Just recently Salesforce has been heralded as a Leader in the 2015 Magic Quadrant for Mobile Application Development Platforms, which is a clear sign that the company provides a trustworthy app development platform for innovative companies all around the world. A recent study reveals that the usage of the Salesforce Platform generates 52% faster application deployment, 50% faster new application design, 52% faster application configuration and a 42% reduction in IT costs. Within our database, Christopher Lord’s Criterion Capital is the largest investor in salesforce.com inc. (NYSE:CRM) as of March 31, holding an ownership stake of 1.76 million shares.
