Knowledgeable investors usually pay close attention to the insider activity in different companies, rightfully assuming that the insiders have better knowledge of what’s going on within the company than any of us. Thus, one can get a feeling about a company’s prospects simply by watching the trading activity of corporate insiders. High insider buying activity generally suggests confidence in the company’s prospects and indicates a good sign for investors. However, one should not be alarmed by insider selling, except if there is lot of unloading by insiders taking place. Insiders might cash out their stakes for various reasons that do not relate to their expectations of the company. Nevertheless, if there is a lot of insider selling activity from numerous insiders over a short period, this might indicate that something is going on within the company. In the following article, we will discuss three companies which had a large volume of insider selling in terms of value by one or more insiders this week. The companies in question include: NIKE Inc. (NYSE:NKE), Juniper Networks Inc. (NYSE:JNPR), and Texas Instruments Inc. (NASDAQ:TXN).
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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.
Let’s start off by taking a look at the first company on our list, NIKE Inc. (NYSE:NKE). Mark G. Parker, the Chief Executive Officer and President of Nike, has unloaded a part of his stake in the company recently. Specifically, he made three sales on July 28 and July 29, amounting to 200,000 shares, at prices ranging from $112.00 to $113.50. And Parker is not the only insider who has been selling shares of NIKE lately. Bernard F. Pliska, the Vice President of Nike, and Hilary K. Krane, the Chief Administrative Officer and Executive Vice President of Nike, sold shares during the same two-day period, 36,000 shares and 28,869 shares, respectively. The shares of Nike are currently trading at an all-time high, reaching an increase of nearly 20% year-to-date. Sports shoes have been experiencing a strong year thus far, with an increase in sales of 8% and prices up by 7% in the first half of the current year. In addition to that, the sales of children’s sports shoes have seen a boost of 11% thanks to the high demand for back-to-school items. Considering the 58% market share Nike has, it is no surprise that its stock is currently trading at an all-time high. Within our database, Paul Ruddock and Steve Heinz’s Lansdowne Partners represents the largest investor in NIKE Inc. (NYSE:NKE) as of March 31, with 8.77 million shares.
