Insider Selling at Delphi Automotive PLC (DLPH)

Visteon is an auto parts company that trades at an outsized earnings multiple (76x), but investors are banking on management unlocking shareholder value with a breakup of the company. Even with a high trailing P/E, investors can still find value in the company where it only trades at 13x forward earnings. Visteon has billionaire Steven Cohen as one of its top investors in 3Q (check out Steven Cohen’s newest stock picks).

Lear recently posted 3Q EPS results of $1.29 versus $1.08 from the same quarter last year, and above estimates of $1.21 a share. Lear trades at only 9x earnings and should see future growth driven by strong U.S. and Asia auto sales. Lear had billionaires Steve Cohen and Ken Griffin upping their stakes during 3Q.

Last but certainly not least, Autoliv trades at an attractive P/E at 11x and pays a solid dividend that yields 3.3%, but we believe it could be a value trap. Even with a beta of 2.0, Autoliv is only up 13% year to date. The biggest worry, though, is future growth, as this automaker expects to only grow EPS at 2% annually for the next five years.

To recap: the reasoning behind the recent Delphi insider selloff may be twofold. Firstly, the fact that shares are up substantially since its emergence from bankruptcy could indicate that profit taking is in order. Otherwise, bearish insider activity may tell investors that a turnaround – and additional growth – will take longer than expected.