What the Insider Selling at these Companies Could Tell Investors About Their Future

Tech Data Corp (NASDAQ:TECD) also had an insider offload shares this week. Director David M. Upton reported selling 1,572 shares on Monday at prices that ranged from $61.64 per share to $61.76 per share. After the recent sale, the Director holds an ownership stake of 13,984 shares, which includes 1,751 unvested restricted stock units (RSUs). Even though this insider sale is not overly significant, the timing of the trade might raise red flags for some investors. The stock has been sliding since mid-November, and the recent sale might suggest that there are no positive developments anticipated any time soon (or that the trading window for insiders had been shut down until this week). Even so, the shares of the wholesale distributor of technology products are up by 6% over the past year and trade at attractive P/E ratios.

Tech Data’s consolidated net sales for the first nine months of fiscal year 2016 totaled $18.90 billion, down by roughly 7% compared to the same period of fiscal year 2015. The decrease might serve as reason for concern for some investors, but they should keep in mind that the decrease was mainly attributable to the strong U.S dollar and the exiting of its operations in Chile, Peru and Uruguay. Excluding these two factors, the company’s net sales increased by roughly 5% year-over-year. In the meantime, the stock trades at a forward P/E ratio of 10.31, which is substantially below the ratio for the S&P 500. The hedge fund sentiment towards the stock improved noticeably during the third quarter, as the number of top money managers with positions in the company climbed to 25 from 20 quarter-over-quarter. Joel Greenblatt’s Gotham Asset Management holds 878,261 shares of Tech Data Corp (NASDAQ:TECD) as of September 30.