Investing

Gigantic Charles Schwab Sale Highlights Recent Insider Selling

As the earnings continued to roll in this past week, the volume of insider transactions was still very slow, as many of the companies have shut the door for the purchase or sale of stock during the third-quarter earnings reporting season. While this happens every quarter during earnings, some top executives and 10% holders get a little more eager as the end of the year approaches and may be looking forward to restrictions being lifted next month.

We cover insider selling every week at 24/7 Wall St., and we like to always remind readers that just because an individual or 10% institutional owner is selling stock, that is no cause for immediate alarm. Many top executives, and even directors, are compensated with stock, and they often sell just to diversify or purchase other assets.

Here are companies that reported notable insider selling this week.

Charles Schwab Corp. (NYSE: SCHW) hits our 24/7 Wall St. insider screens on both the buy and the sell desk this week. The chairman of the company, Charles Schwab, continues to sell stock at an orderly pace. This week the iconic discount brokerage founder sold some 350,000 shares of the company at prices between $28.44 and $29.38 per share. The total for the trade came to a whopping $10.1 million. As we have noted in the past, Schwab is close to 80 years old, and much of his selling over the years probably has been for estate planning purposes. The shares were trading on Friday’s close at $30.43, so even an old pro can leave a little on the table.

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Capella Education Co. (NASDAQ: CPLA) hits our screens again, and the selling has been pretty heavy. One director at the company sold 120,973 shares of the stock last week at prices that fell between $51.09 and $56.73. The total for the trade came to $6 million. Another director sold 68,773 shares at between $52.26 and $56.73 apiece. The total for this trade was $3.7 million. Capella operates as an online postsecondary education services company primarily in the United States. With earnings expected to be reported October 27, these sales could prove very interesting. The stock ended the week at $52.75.

Western Alliance Bancorp. (NYSE: WAL) is another company in which we have seen some recent insider selling. This past week, an executive vice president and a director at the company were selling shares. They parted with a total of 32,471 shares at prices between $34.52 and $34.73 apiece. The total for the sales came to $1.1 million. This bank holding company for Western Alliance Bank provides various banking products and related services primarily in Arizona, California and Nevada. The stock closed trading Friday at $36.24, so some money was clearly left on the table.

While last week was decidedly slow for the insiders selling stock, that has been the case since the big market drop in late August. One thing that we have continued to point out over the past two months as the market has recovered is that light insider selling is one of the most bullish indicators out there. When top executives, 10% institutional owners and others are reluctant to sell stock, it means that they think ultimately that the stock prices are going higher. Therefore, they remain very content to wait.

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