Executives Are Selling These 3 Stocks; Should Investors be Wary?

Lastly is Donaldson Company Inc. (NYSE:DCI), which registered a high volume of insider selling over the last two months of 2015, while insider buying activity hasn’t been witnessed since 2012. On Wednesday of last week, Chief Information Officer and Vice President Mary Lynne Perushek discarded 1,391 shares at $26.79 apiece, reducing her holding to 31,244 shares.

The shares of the global manufacturer of filtration systems and replacement parts are down by 27% over the past year, so the heavy insider selling witnessed at the company might raise red flags for some investors. The company considers having a global presence as one of its core strengths, but its high global exposure did impact its financials in recent quarters as a result of sluggish global economic growth and weakening currency translations. The company reported sales of $538.0 million for the first quarter of fiscal year 2016 that ended October 31, down by 9.8% compared to the first quarter of the prior fiscal year. The company’s top-line decline was mainly attributable to the negative impact of foreign currency, a decline in engine products sales and flat sales in the Industrial Products segment. The sluggish demand for replacement filters and the sustained decline in demand from original equipment manufacturers (OEMs) in the construction, mining, agriculture, aerospace, defense, and truck markets stand behind Donaldson’s disappointing performance. The number of smart money investors with positions in the company climbed to 22 from 15 during the third quarter, which included David Blood and Al Gore’s Generation Investment Management reporting ownership of nearly 655,000 shares of Donaldson Company Inc. (NYSE:DCI) through its 13F filing for the third quarter.

Disclosure: None