Insider selling usually doesn’t mean that stocks will decline. The stocks insiders sell as a group don’t underperform the market. However, recent research on insider selling shows that stocks sold under the 10b5-1 plans specifically have large negative abnormal returns. The magnitude of the abnormal returns is about 70 basis points per month, calculated by using Carhart’s four factor model. Insider Monkey, your source for free insider trading data, compiled the list of the 10 stocks insiders sold recently under 10b5-1 plans:
1. Magellan Health (MGLN): Several insiders were selling Magellan Health around $50 per share.
2. General Dynamics (GD): $70 is the magic level for GD insiders to sell. There were more than a dozen insiders selling around $69-$70.
3. Kulicke & Soffa Inds. (KLIC): Kulicke & Soffa insiders were selling as the stock climbed more than 50% during the past two months. The latest transaction was done at $9.
4. Texas Instruments (TXN): Teresa West, SVP at Texas Instruments, sold 60,000 shares at the end of November. Last Friday, she sold another 24,000 shares at $33.95 under a 10b5-1 plan.
5. KLA-Tencor (KLAC): The most recent insider sale at KLA-Tencor was at $41.84.
6. Pinnacle Entertainment Inc (PNK): Last week insiders at Pinnacle Entertainment were selling at around $15 per share.
7. United Health (UNH): EVP and General Counsel of United Health sold his shares under a 10b5-1 plan last week when the stock hit $39 per share. Hedge fund managers David Tepper and Bridger Management’s Roberto Mignone have large investments in UNH.
8. Triquint Semiconductor (TQNT): Insiders at Triquint Semiconductor were selling above $13.50 per share.
9. Ciena Corp (CIEN): The last insider sales at Ciena were at $25.03. A week before that another insider sold his shares at $23.54.
10. Einstein Noah Restaurant Group (BAGL): The CEO of Einstein Noah exercised his options and sold his shares at $14.66. David Einhorn owns 10 million shares of BAGL.