Should These Companies’ Insider Selling Alarm Investors?

Corning Incorporated (NYSE:GLW) also had one of its executives sell a sizable block of shares last week. Vice Chairman James B. Flaws sold 69,519 shares on Thursday at $18.5 apiece and currently owns 275,074 shares. He also served as the Chief Financial Officer of Corning from December 1997 to August 2015. The shares of the high-tech glass maker are down 24% over the past year, but are trading in positive territory thus far in 2016. The company did not have a great 2015 in terms of top- and bottom-line growth last year, but its management anticipates that business conditions will improve gradually in 2016. Corning generated core earnings per share of $1.40 on core sales of $9.8 billion in 2015, as compared to core EPS of $1.42 on $10 billion in core sales reported for 2014. Corning is widely-known for its Gorilla Glass, which is a scratch-resistant glass used in smartphones, but most of its revenues are generated from the sale of glass used in LCDs. The aggregate LCD glass price has been on a decline in the past several years, and yet the price decline in 2015 was the lowest in five years. Furthermore, the company anticipates that the moderation of LCD glass price declines will continue throughout 2016, which could assist the company in achieving a turnaround. Meanwhile, the stock trades at a forward P/E multiple of 11.35, which compares to the average of 15.87 for the S&P 500 Index. A total of 38 hedge funds tracked by Insider Monkey were invested in the company at the end of the third quarter, amassing 4.60% of its total shares. Kerr Neilson’s Platinum Asset Management owns 9.62 million shares of Corning Incorporated (NYSE:GLW) as of September 30.

The insider selling activity at Align Technology Inc. (NASDAQ:ALGN) has been intensifying over the past several months, so let’s try to figure out what might have propelled insiders’ bearishness. Director Gregory J. Santora unloaded 9,000 shares on Thursday at a weighted average price of $67.28, all of which were held by a family trust fund. All shares that were previously shown as owned directly by the Director are currently owned by the family trust, which now holds an ownership stake of 26,900 shares. The medical device company operates through two main segments: Clear Aligner, known as the Invisalign System; and Scanner and Services, which comprise the iTero intraoral scanners and OrthoCAD services. The company’s financial performance is highly dependent on the Clear Aligner segment, as it accounted for nearly 95% of net revenues for 2015. Invisalign is a very efficient approach to straightening teeth by utilizing a custom-made series of aligners (which are changed approximately every two weeks), and Align Technology aims at establishing Invisalign clear aligners as the main method for treating malocclusion. For that reason, the company started a new product policy called “Additional Aligners at No Charge” in July 2015. Align Technology reported revenues of $845.5 million for 2015, up by 11.0% on the year. In the meantime, the shares of the medical device company have advanced almost 20% over the past one-year period and are currently trading near an all-time high, so it is no wander why the company  has been witnessing escalating insider selling. Jacob Gottlieb’s Visium Asset Management was the owner of 1.37 million shares of Align Technology Inc. (NASDAQ:ALGN) at the end of September.

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