As the market surges to new highs, insider selling has surged with it. A report issued by Argus Research last week showed that the ratio of insider selling to insider buying transactions had reached its highest level in over a year, which preceded a prolonged market slump. Furthermore, data released by S&P Global Market Intelligence shows that the trailing price-to-earnings ratio of the market has ballooned to 23.3-times, the second-highest level ever, beaten only by the tech bubble of 2000.
Given that, it’s unsurprising that insiders are growing more cautious as many of their companies reach new highs and valuation multiples. We witnessed that caution again today as we poured over the recent filings from insiders, which were predominantly sales transactions. In this daily insider trading article, we’ll take a look at five of those prominent filings, which includes one company with insider buying and four with insider selling.
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More Insider Buying at Life Storage Inc (NYSE:LSI)
We’ll start with Life Storage Inc (NYSE:LSI), which had the lone case of insider buying activity which we’ll cover in this article. Arthur L. Havener Jr., a Director on the company’s Board, bought 600 shares at a price tag of $88.55 each on Wednesday, lifting his direct ownership stake to 2,563 shares. The purchase is the latest in a string of recent insider purchases at the company, which included two other purchases of a total of 870 shares by Mr. Havener himself last week. Director Mark Barberio and Independent Director Stephen Rusmisel have also purchased shares this month, 1,800 in total.
The heightened insider buying comes amid Life Storage Inc (NYSE:LSI) shares slumping heavily in August, with them trading down by 13.72% this month. The REIT, formerly known as Uncle Bob’s Self Storage and trading under the name Sovran Self Storage and the ticker symbol SSS, was rebranded earlier this month. The company manages over 650 self-storage facilities totaling over 45 million square feet of storage space. Life Storage was downgraded by Jefferies to ‘Hold’ from ‘Buy’ on August 10, while the target price on the stock was slashed to $100 from $135, which contributed to some of the recent selling pressure on the stock. Life Storage had enjoyed a steady run-up coming out of the financial crisis, gaining over 500% during the seven-year period between March 13, 2009 and March 11, 2016. 22 hedge funds in our database were shareholders of Life Storage on June 30.
Insider Selling Continues at Parsley Energy Inc. (NYSE:PE)
Parsley Energy Inc. (NYSE:PE) has registered more insider selling, coming on the heels of a cluster of insider selling activity that we reported on two weeks ago. Vice President and COO Matthew Gallagher sold a total of 45,000 shares between Monday and Wednesday, at prices that fell between $33.70 and $34.06 per share. The VP now holds a direct ownership stake of 597,406 class A shares, as well as 1.00 million class B voting shares which have no economic rights.
It’s not surprising to see some insider selling at the energy company, whose shares have gained 84% this year and enjoyed another spike in early-August that preceded the recent wave of selling activity. Parsley Energy Inc. (NYSE:PE)’s strong second quarter results provided the impetus for that pop, as its adjusted earnings of $0.04 per share trounced estimates that been predicting a slight loss. The company also enjoyed a surge in production output during the quarter, to the tune of a 60% year-over-year increase to 35,700 barrels of oil equivalent per day. Amy Minella‘s Cardinal Capital opened a Parsley Energy stake containing 1.60 million shares during the second quarter.
We’ll check out the noteworthy insider selling activity at three other companies on the next page.