What Has Insiders at Cisco Systems Inc. (CSCO) And Other Companies Cashing Out Their Holdings?

The Standard & Poor’s 500 Index registered its best trading week in 2015, as the benchmark gained nearly 3.3% last week. Most stock market participants gave a positive response to the increasing likelihood of seeing a rate hike this year, which could suggest that both the Fed and market participants believe in the strength of the U.S economy and the ancillary benefits to it of such a hike. A potential new wave of economic stimulus on the European continent and in Japan may have also diminished some of the fears about a slowing global economy, so it appears that equities are poised to go higher in the weeks ahead. One could expect insider selling activity to explode amid a rally in U.S equities, but statistics reveal that insiders sold less stock last week relative to the previous one. This might point to the fact that insiders do not have doubts about the strength and longevity of last week’s rally. Moving on to the underlying purpose of this daily insider trading article, we will discuss the insider sales registered at three companies and the recent performance of the companies in question.

Prior to discussing the insider trading activity, let’s make you familiar with what Insider Monkey does besides providing high-quality articles. At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.

Let’s begin our discussion by closely examining the insider selling activity observed at Hanover Insurance Group Inc. (NYSE:THG). President and Chief Executive Officer Frederick H. Eppinger sold 100,000 shares on Wednesday at a weighted average sale price of $84.50, cutting his stake to 321,102 shares. The CEO also holds an indirect ownership stake of 200,612 shares via a Rabbi Trust, pursuant to deferral agreements. The provider of various property and casualty insurance products and services recently reported strong third quarter financial results, posting net income of $78.3 million or $1.74 per diluted share, up from $54.9 million or $1.22 per diluted share reported for the same period of last year. Meanwhile, Hanover Insurance Group Inc. (NYSE:THG)’s stock is up by 18% this year, but its trailing price-to-earnings ratio of 11.08 suggests that there is more upside for the stock given the company’s current earnings power. This compares with a 23.12 ratio for the S&P 500 companies. 20 hedge funds observed by Insider Monkey owned the stock at the end of the third quarter, up by four quarter-over-quarter. Lee Munder Capital Group, founded by Lee Munder, owned approximately 504,000 shares of Hanover Insurance Group Inc. (NYSE:THG) as of September 30.

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The next page of this article discusses the insider selling at Cisco Systems Inc. (NASDAQ:CSCO) and Regency Centers Corp (NYSE:REG).