What Has These Companies’ Insiders Cash Out Ahead of 2016?

Aetna Inc. (NYSE:AET) also registered a high volume of insider selling in recent weeks. Margaret M. McCarthy, Executive Vice President of Operations and Technology since 2010, offloaded 18,373 shares on December 23 at a weighted average price of $109.97 and currently owns 64,515 shares. The shares of this diversified health care benefits company are up almost 22% for the year, which could somewhat justify the executive’s decision to cash out. In early July, Aetna and Humana Inc. (NYSE:HUM) sealed a merger agreement under which Humana was acquired for roughly $37 billion. This deal is anticipated to close in the second half of 2016, which will create one of the largest health insurance companies in the United States. Aetna appears to be an attractive investment opportunity at the moment, considering several valuation metrics. The stock trades at a trailing price-to-earnings ratio of 16.58, which is below the average of 22.95 for the companies included in the S&P 500. In the meantime, analysts anticipate full-year EPS growth of roughly 7% next year, which yields a forward P/E ratio of 13.39 (the forward P/E for the S&P 500 Index equals 17.44). The number of hedge fund investors from our database with positions in the company declined to 70 from 80 during the September quarter. Daniel S. Och’s OZ Management acquired a 3.75 million-share stake in Aetna Inc. (NYSE:AET) during the third quarter.

Nuance Communications Inc. (NASDAQ:NUAN) saw an insider selling big in the past two weeks. Chief Executive Officer Paul A. Ricci sold 150,000 shares at prices between $20.15 and $20.35, trimming his total holding to 937,173 shares. The provider of voice recognition solutions and natural languages understanding technologies has seen its shares advance by over 40% in 2015, so it is not wonder why the CEO has decided to cash out. The company posted total revenues of $1.93 billion for fiscal 2015, up from $1.92 billion reported for fiscal 2014. This increase was mainly achieved due to higher professional services and hosting revenue. Analysts anticipate earnings per share of $1.56 for the next fiscal year, which results in a forward P/E ratio of 12.79. Although there is a growing number of companies that develop solutions and technologies similar to the ones offered by Nuance Communications, there is no company that competes with all Nuance’s solutions and technologies. Even so, some of its competitors, including Microsoft, Google, and Adobe, in specific target markets have substantially higher financial and technical resources than Nuance, which could adversely impact its ability to respond to new technologies and changing customer trends. A total of 30 hedge funds tracked by Insider Monkey were invested in the company at the end of the third quarter, as compared with 25 reported at the end of the prior quarter. Billionaire Carl Icahn of Icahn Capital LP owns 60.78 million shares in Nuance Communications Inc. (NASDAQ:NUAN) as of September 30.

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