Should The Insider Selling At These Companies Give Cause For Concern?

Moving on to the next potential underperformer, NV5 Holdings Inc. (NASDAQ:NVEE)’s Executive Vice President, Donald C. Alford, offloaded 20,000 shares last week at prices between $18.10 and $18.22. Following the recent sales, the executive holds a 48,543-share position. NV5’s shares have greatly outperformed the broader market in 2015, delivering a year-to-date return of over 46%. However, the recent market selloffs have impacted the company’s stock performance as well, which could hint that the insider is fearing more volatility and a potential pullback in the months ahead. The provider of professional and technical engineering and consulting solutions delivered a very strong financial performance in the second quarter, posting gross revenues of $34.5 million, which were up by 18% year-over-year. The company’s net income increased by 64% year-over-year to $1.7 million. The third quarter earnings report of NV5 Holdings will surely shed some further light on the direction of the company, but the insider selling activity might be taken as a bearish sign for the time being. Royce & Associates, founded by Chuck Royce, owns 3.49% of NV5 Holdings Inc. (NASDAQ:NVEE)’s outstanding common stock as of June 30, representing nearly 275,000 shares.

Last but not least, we will look into the insider trading activity at Korn/Ferry International (NYSE:KFY). Director Harry L. You sold 4,000 shares last Friday in multiple transactions at a weighted average price of $32.48. After the moves, the Director holds 13,400 shares. The stock of the international recruitment company has had a great run in 2015, advancing by more than 15% year-to-date. A few weeks ago, Korn Ferry announced its agreement to acquire the HR consultancy firm Hay Group for approximately $452 million. The freshly-announced combination is set to generate cost synergies of $20 million over the next year by increasing its use of technology and by divesting some assets. At the same time, the combined entity intends to reach an EBITDA margin in the range of 14%-to-18%. With this in mind, it appears that there are no firm-specific reasons that might have caused the Director to sell stock, but there is still huge room for speculation (e.g. further correction). Israel Englander’s Millennium Management disclosed owning almost 476,000 shares of Korn/Ferry International (NYSE:KFY) as of June 30.

Disclosure: None