Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Insiders Dumping These Three Well-Performing Stocks

Page 1 of 2

Many believe that tracking insider trading activity represents a crucial part of the investment selection and research process, and should be closely watched on a regular basis. Finance professor at the University of Michigan Nejat Seyhun, considered one of the leading researchers in the insider trading sphere, has provided empirical evidence that insiders’ trades tend to greatly outperform the broader market over the following one-year period. His research papers also indicate that it is not worth monitoring the insider trading activity of everyone who comprises the group of people fitting the legal definition of ‘insider’. This is one of the main reasons the Insider Monkey team focuses on the insider trading activity of directors and executives only. However, insider selling frequently occurs for reasons unrelated to a company’s prospects, so the interpretations of insiders’ sales may not be accurate on all occasions. Even though insider selling might not provide a good barometer to know if or when a company’s stock will start declining, this type of activity might suggest that insiders are no longer betting on major stock price appreciation. With this in mind, the following article will examine the insider selling activity at three companies.

Prior to discussing the insider trading activity at those three companies, let’s make you familiar with what Insider Monkey does besides providing high-quality evidence-based articles. At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.

Adobe Systems Incorporated (NASDAQ:ADBE) is one of the three companies that had insiders sell stock recently. Bradley Rencher, Vice President and General Manager of the Digital Marketing Business Unit, reported selling 26,000 shares on Thursday at a weighted average sale price of $88.66. However, 10,000 of these shares represent freshly-exercised options, so the net sale adds up to 16,000 shares. After the recent transactions, Bradley Rencher owns 25,503 shares. The diversified software company has seen other insiders unload shares lately, but they sold only newly-exercised stock options. The shares of Adobe Systems Incorporated (NASDAQ:ADBE) are currently trading near their all-time high, so there is no wonder why insiders have been offloading their holdings recently. However, the stock is trading at a 12-month forward price-to-earnings ratio of 31.45, compared to a median of 38.8 for the application software companies included in the Standard and Poor’s 500 Index. Within our extensive database, Jeffrey Ubben’s ValueAct Capital was the top stockholder of Adobe Systems Incorporated (NASDAQ:ADBE) at the end of the second quarter, with 15.70 million shares.

Follow Adobe Systems Inc (NASDAQ:ADBE)
Trade (NASDAQ:ADBE) Now!

The next page of the article will disclose the insider selling activity at two other strong-performing companies.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!