Insiders Are Running Away From Adobe Systems Incorporated (ADBE) and Two Finance-Related Companies (REIT and Investment Management Firm)

The insider selling activity at Adobe Systems Incorporated (NASDAQ:ADBE) has been extremely high in the past several months, though some insider sales were connected with newly-exercised stock options. Donna Morris, Senior Vice President of Customer and Employee Experience, sold 25,000 shares on Tuesday at $93 apiece, all of which were held by the Morris Family Rev Trust. Following the recent sale, the trust fund continues to own 74,008 shares. Moreover, John E. Warnock, co-founder of Adobe Systems and Co-Chairman of the company’s Board, discarded 9,000 units of common stock on Monday at prices ranging from $92.69 to $92.72 per share, which were held by the Warnock Family Trust that currently owns 587,703 shares. The Co-Chairman also holds a direct ownership stake of 22,868 shares.

The shares of the software giant have enjoyed a great run in the past several years, as they have gained 169% in the past five years. The stock has advanced 26% in the past year, despite having experienced a sharp pullback from early 2016 through mid-February. Adobe Systems Incorporated is a developer and marketer of software tools for creating, managing, measuring and optimizing digital design content that used to be sold physical copies for set fees. However, the highly-diversified software company has successfully adopted the transition to a subscription-based model in recent years, a cloud computing transition that has paid off handsomely for both shareholders and the company itself. The company’s subscription revenue as a share of total revenue increased to 67% from 50% during fiscal 2015 that ended November 27, thanks to the successful transition to a subscription-based model. Just recently, the company reported its financial results for the first quarter of fiscal year 2016 that ended March 4, posting record Digital Media segment revenue of $932 million, which grew 33% year-on-year. Adobe’s Creative revenue, which includes the company’s Creative Cloud and perpetual creative offerings, increased 44% year-on-year to a record $733 million. Meanwhile, the stock is priced at 24.9-times expected earnings, below the forward P/E ratio of 36.2 for the Application Software sector. The hedge fund sentiment towards Adobe Systems increased in the fourth quarter of 2015, with the number of funds bullish on the company climbing to 46 from 42 quarter-on-quarter. Stephen Mandel’s Lone Pine Capital reported ownership of 4.01 million shares in Adobe Systems Incorporated (NASDAQ:ADBE) in its 13F filing for the December quarter.