Insider Selling Slows as Earnings Season Begins

As we head into the second quarter and a new earnings season, which begins in earnest next week, it is very possible that the insider selling that was so big last month will start to taper off. As we have noted before, insiders are typically barred from trading when it gets close to earnings announcement time.

We like to remind readers that insider selling does not by any means indicate something is wrong at the companies the insiders work for or hold 10% positions in. Many executives and board members are paid or receive a bonus with stock and stock options. Often they sell simply to diversify. When the selling looks desperate, we point it out.

Here are the companies that reported notable insider selling this week.

Toll Brothers Inc. (NYSE: TOL) is a top of the line home builder, and it had a director of the company sell stock this week. Bruce Toll parted with 200,000 shares at $38.98 apiece. The total for the sale came to $7.79 million. The shares were trading on Friday’s close at $39.68, so some money remained on the table.

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Costco Wholesale Corp. (NASDAQ: COST) saw the chairman of the board sell a block of stock this past week. Jeff Brotman sold 93,564 shares of the discount retail giant at prices that ranged from $150.10 to $150.20. The total for the sale came to an even $14 million. Shares ended trading Friday at $149.63, so the timing looks good.

Cheniere Energy Inc. (NYSE: LNG) had a senior vice president of the company sell stock this week. A block of 40,000 shares of the stock was sold at $78.05 per share. The total for the trade came to $3.1 million. The company has had a very solid year, as opposed to many energy companies. The stock closed trading Friday at $78.86.

Cooper Companies Inc. (NYSE: COO) saw the CEO and a director of the company selling shares. The pair sold 12,000 shares at prices that ranged from $185.00 to $185.42. That netted them $2.3 million. The company develops, manufactures and markets a range of contact lenses, including spherical lenses and toric and multifocal lenses that correct near and farsightedness, as well as address various complex visual defects, such as astigmatism and presbyopia. The stock ended the week at $187.25, so some money remained on the table.

Molina Healthcare Inc. (NYSE: MOH) had an executive from the C suite selling stock this week. The CEO with his name on the door, Dr. Joseph Molina, sold a block of 34,000 shares at $67.20 apiece. The total for the transaction came to $2.28 million. Molina Healthcare provides Medicaid-related solutions to meet the health care needs of low-income families and individuals, as well as to assist state agencies in their administration of the Medicaid program. The shares closed trading Friday at $66.66.

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Other companies also reporting insider selling last week include G-III Apparel Group Ltd. (NASDAQ: GIII) and Memorial Resource Development Corp. (NASDAQ: MRD).

Light selling could be the norm for the next four to six weeks as the first-quarter earnings results start to hit the tape hot and heavy next week.