Forget One-Time Dividends... Watch Massive Insider Selling Into Year-End
We are seeing larger insider selling transactions ahead of year-end by many corporate insiders. With higher taxes on capital gains an almost certainty now, insiders are faced with a choice of selling now while capital gains are at the lowest rates ever again or sell when rates are higher AND when there might be another recession.
We already addressed a nearly $200 million sale in the last week by Jeff Bezos of Amazon.com Inc. (NASDAQ: AMZN). There are many other large insider selling transactions which have been seen from SEC filings as well. The insiders at Google Inc. (NASDAQ: GOOG) continue to sell shares. This is not really a new trend at Google but the dollar volumes still look big. Sergey Brin sold $57 million worth of stock, Eric Schmidt another $25 million worth, John Doerr another $13 million worth, and more than $10 million worth from a director named Shriram. Progressive Corp. (NYSE: PGR) saw share sales in the last days of November by Chairman Peter Lewis of more than 2 million shares coming close to $45 million worth of stock.
Whole Foods Market, Inc. (NASDAQ: WFM) saw shareholder Green Equity Investors unload shares in the last days of November worth close to $44 million. These shares were on top of very large gains on shares bought during harder times.
UnitedHealth Group Inc. (NYSE: UNH) saw CFO David Wichmann sell more than 800,000 shares for gross sale proceeds of more than $43 million in the final days of November.
Eagle Materials Inc. (NYSE: EXP) saw multiple sales as well. A director (Hirsch) sold $36 million worth of stock, followed by another $16 million worth; Its President Steve Rowley sold $10.8 million worth of stock.
Intuitive Surgical, Inc. (NASDAQ: ISRG) saw Chairman Lonnie Smith sell almost $14 million worth of stock in a sale in the last days of November.
Goldman Sachs Group Inc. (NYSE: GS) saw CFO David Viniar sell 100,000 shares for gross proceeds of more than $11.8 million at the end of November.
DSW Inc. (NYSE: DSW) saw Chairman Jay Schottenstein sell more than 154,000 shares for gross proceeds of $10.5 million at the end of November.
Visa Inc. (NYSE: V) saw various executives sell close to $20 million worth of stock in the last days of November and start of December.
Zebra Technologies Corp. (NASDAQ: ZBRA) has seen EVP Gerhard Cless sell almost $7.5 million worth of shares at the end of November and start of December.
Again, it is not hard to imagine why directors and insiders would be selling into year-end. It is highly probable that capital gains taxes will never be at 15% for the wealthy again. If they wait to sell after the first of the year they will be selling at higher tax rates and they are taking the risk that the US drives off the fiscal cliff.
JON C. OGG