Insider Selling Warning! Should These 3 Companies’ Investors Be Worried?

PMC-Sierra Inc. (NASDAQ:PMCS) has registered a high volume of insider selling this month, but most insider sales were made in connection with the exercise of stock options. On the other hand, President and Chief Executive Officer Gregory S. Lang unloaded 292,006 shares on Tuesday at $11.86 apiece, cutting his overall holding to 251,983 shares. At the end of November, the Sunnyvale-based, fabless semiconductor and software solution innovator announced that it had agreed to be bought by Microsemi Corporation (NASDAQ:MSCC) for approximately $2.5 billion. Microsemi outstripped the all-cash bid of $2.24 billion proposed by another bidder, Skyworks Solutions Inc. (NASDAQ:SWKS). Under the terms of the merger agreement, shareholders of PMC are set to receive $9.22 in cash and 0.0771 Microsemi shares for each share of PMC. The discrepancy between the offer price and current share price of PMC is very tiny, so it is not surprising that the CEO decided to cash out a portion of his holding. Microsemi Corporation (NASDAQ:MSCC) expects to reach annual cost synergies of at least $100 million through the deal, while more than $75 million of this figure is anticipated to be realized in the first full quarter of their combined operations. Eric Bannasch’s Cadian Capital reported owning 29.68 million shares of PMC-Sierra Inc. (NASDAQ:PMCS) through its 13F filing for the third quarter.

Let’s wrap up our discussion of insider selling with Campbell Soup Company (NYSE:CPB)’s recent insider sale. Senior Vice President and Chief Financial Officer Anthony P. DiSilvestro sold 40,000 shares on Tuesday at a weighted average sale price of $53.44, trimming his direct ownership stake to 108,245 shares. The shares of the manufacturer and marketer of branded convenience food products are up by 20% this year and are trading near their all-time high. However, the stock is trading at a relatively expensive trailing P/E ratio of 25.48, which is above the ratio for the S&P 500 benchmark. The company’s net sales for the third quarter totaled $2.20 billion, a 2% decline year-over-year. This decrease was mainly attributable to the negative impact of currency translation and volume declines, which were in turn offset by higher selling prices and reduced promotional spending. Campbell Soup’s marketing and selling expenses dropped by 7% year-over-year, mainly as a result of lower advertising and consumer promotion expenses, and cost cutting efforts. Research firm Argus recently upgraded the stock to ‘Buy’ from ‘Hold’ and established a price target of $65 on it, saying that “the company’s cost savings initiatives and ability to raise prices warrant a higher P/E multiple”. Renaissance Technologies acquired a 234,400-share stake in Campbell Soup Company (NYSE:CPB) during the July-to-September period.

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