Do These Selling Insiders Know Something You Don’t?

FactSet Research Systems Inc. (NYSE:FDS) has witnessed high insider trading activity on the sell side in 2016, but most insider sales were made in connection with the exercise of non-qualified stock options. According to a recent Form 4 filing, Director Joseph E. Laird sold 1,000 shares on Thursday at $147.50 apiece and currently owns 7,000 shares. It is not the size of the sale that should catch investors’ attention, but rather the timing of the sale that should be examined. Even though most insiders at FactSet sold shares in relation to the exercise of stock options, the timing of their sales points to not-so-bright prospects for the stock. By simply looking at the chart showing FactSet’s stock performance and considering the recent insider selling, most individuals would conclude that FactSet’s management anticipates worsening fundamentals.

The provider of integrated financial information and analytical applications reported revenue of $270.5 million for the first quarter of fiscal year 2016 that ended November 30, up from $242.7 million reported a year earlier. The increase was mainly achieved due to strong organic annual subscription value growth. The company’s organic ASV growth rate reached 9.4% for the first quarter of fiscal year 2016, compared to 8.5% registered a year earlier. FactSet’s expectations for the second quarter of fiscal year 2016 suggest that the company has more room to run in the upcoming quarters. The company anticipates second-quarter revenue to be in the range of $280 million-to-$286 million. Jim Simons’ Renaissance Technologies upped its position in FactSet Research Systems Inc. (NYSE:FDS) by 25% during the third quarter to 278,800 shares.