Just look at the SEC filings. Insiders are unloading stocks at staggering quantities. But selling is the nature of the casino market and insiders always sell stock, at least the smart ones. But some selling is more portending than others. Here’s my reading of the tea leaves and as usual any actionable trading ideas I can glean from it.
SO Southern Company made a lifetime high on 5-19 at $40.87. According to the Washington Service “At Southern Co. (SO), the stock reached a 52-week high on 5/19/11, and has slipped only slightly since that high. Ten insiders cashed in on the price in May, exercising shares and then selling them all for $27.2 million in the largest monthly sales total ever for the company. All of the exercised shares had years left before the options would have expired, indicating that the insiders may not expect a higher price in the near future.
MSFT Bill Gates unloaded his usual $500 million dollars worth of stock last month. It’s quite astonishing to imagine his wealth that he could sell $500 million dollars worth of stock every month for the next two years and have some left over. At least it’s going to a good cause and no one can fault him for that. I’m sure MSFT shareholders would like him to sell it all so they can get someone new running the show. Gates is not likely to throw Balmer over the side of the boat that made them some of the richest people in history.
ACOM Ancestry.com Victor Parker unloaded $210 million as I think part of Spectrum Equity, a private equity company that invested in Ancestry.com. These shareholders have really made out well on this company that went public only in the last two years. Short sellers have taken it on the ear. The short float is 22% of shares outstanding. I have to say I was in that camp, at least mentally, until I saw my 12-year-old spend a fascinating evening looking up the grandparents he never knew. It was very impressive. The only explanation I can have though why someone would subscribe to this information on a monthly basis is that parents must think it’s just another monthly bill from XBOX Live. At least I’m not standing in the way of this freight train. The shorts are getting crushed. The stock rocketed over 40% when they last reported earnings on massive increase in volume. Classic short seller panic stampede. Read this good analysis from the Street.com for more information.
KEG Key Energy Services Most notable selling was investor group 77.3% reduction in holdings by OFS Holdings on 5-2 at $17.63. This wouldn’t be notable except there has been persistent insider selling as this stock has benefited from stronger oil and gas exploration environment. This might also be a good pairs trade to short this against SPN where there is inside buying and stock has pulled back recently. This chart from The Washington Service best illustrates this.
CPX Complete Production Services Insiders are really taking advantage of high stock prices. Should you? It’s ironic that natural gas prices are in the toilet but the services companies are printing money.
MSTR MicroStrategy CEO Saylor sells out the rest of his stock according to the filing dated 5-6 through 5-21. He hasn’t been very predictive insider but one has to wonder. I’m always nervous about a company when their business strategy is strewn with buzz words and after reading it, you still don’t really know what they do.