Continued Insider Sales at Hertz Global Holdings, Inc. (HTZ), Recent Action at CBS Corporation (CBS)

Page 1 of 2

There are a number of ways for investors to screen stocks and find potential investment opportunities.  A few of the ways this website focuses on are by tracking hedge fund holdings and insider trading interest. Our studies have shown that those who follow the picks of the top hedge fund managers can beat their index-focused peers by a substantial margin; discover the secrets of this strategy.

With regard to insider sales, the conventional wisdom is that it is impossible to really determine the reason that insiders sell their stock in a company.  The corporate insider could need to meet some unexpected obligations, such as taxes.  Generally, insiders face a strong incentive to diversify their wealth away from the company in which they hold stock or options in order to reduce their risk.

Hertz Global Holdings, Inc. (NYSE:HTZ)

However, when insider selling is undertaken by multiple insiders who are liquidating large amounts of stock, investors should take note. Several academic studies have concluded that tracking insider transactions may be potentially profitable; learn more here.

In this article, we will examine two companies with recent large insider sales.  We can only guess at the reason for the sales, and investors can do more due diligence to determine whether there is a short sale opportunity, perhaps a large red flag to avoid a certain company’s stock, or even an opportunity to go long despite the exit of insiders.

Hertz Global Holdings, Inc. (NYSE:HTZ)

Hertz Global Holdings, Inc. (NYSE:HTZ) is a global car and equipment rental company.  In the last three months, there have been 58 insider trades of the company’s stock.  Fifty-five of those trades were sales, with only 3 being purchases.  The net amount of Hertz Global Holdings, Inc. (NYSE:HTZ) stock sold by insiders during that period is over 51 million shares.  The stock has an average daily trading volume of 8.18 million.

In the last 12 months, there have been sales by insiders of over 118 million shares.  A trio of private equity firms, including the Carlyle Group LP (NASDAQ:CG), Clayton, Dubilier & Rice, and Bank of America Corp (NYSE:BAC)‘s Merrill Lynch unit bought Hertz Global Holdings, Inc. (NYSE:HTZ) from Ford eight years ago. Hertz recently announced that these firms were selling their remaining stake in the company to Goldman Sachs Group, Inc. (NYSE:GS) in a deal valued at approximately $1.24 billion.  Goldman Sachs Group, Inc. (NYSE:GS) will offer the shares to investors on the open market.  As such, much of the insider selling is fueled by the private equity firms exiting their positions.

The private equity firms took Hertz Global Holdings, Inc. (NYSE:HTZ) public in 2006, where it debuted at an IPO price of $15.  The stock is currently trading at $24.84, but only after hitting a low of $1.55 in late 2007.  Many investors are betting on a downturn in Hertz, with a current short interest of 34.9 million shares, representing a high short float of 9.35% and a short ratio of 4.3.  However, the shares have performed extremely well, up 51% YTD.  The share price seems to be hitting near term resistance around $25.  The price needs to break through this level on strong volume in order to head higher.  A failure to break through this level combined with the increased liquidity of stock in the market due to the insider sales could be a bearish indicator.

CBS Corporation (NYSE:CBS)

CBS Corporation (NYSE:CBS) is a global media company that operates in five main segments: entertainment, cable networks, publishing, local broadcasting and billboards.  There have been multiple unique insider sales of CBS Corporation (NYSE:CBS) stock within the last three months, with 58 sales and one large open market purchase of 1 million shares.  The net activity of these transactions is 3.3 million shares sold.  The Company recently announced strong first quarter results, with revenue of $4.04 billion, an increase of 6% from the prior year period.  The Company reported that it had repurchased 24.1 million shares of the stock during the first quarter.  The share price has performed strongly as of late and is up 26% YTD.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 5 Most Gang Infested Cities In America

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!