Investing

Massive Carl Icahn Trade Highlights Recent Insider Selling: Mentor Graphics, Blackrock, UPS, Hasbro and More

Typically investors think of insider selling as a possible negative. In reality, after almost two months of negligible insider selling, this week was the first to show some substantial sales, and that means that insiders feel that the market rally is starting to return some value to overall stock prices. Needless to say, indiscriminate selling at lows is a negative, but we saw little of that this past week.

We cover insider selling every week at 24/7 Wall St., and we like to remind our 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 often sell just to diversify or purchase other assets.

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

Mentor Graphics Corp. (NASDAQ: MENT) had one of Wall Street most influential activist investors selling last week, and selling in a big way. Carl Icahn sold a total of 8,015,145 shares at $18.12. The total for the trade came to a staggering $146 million. The interesting part of this trade is that the buyer of the stock was the company itself, which bought Icahn out of half of his total position. He remains the company’s largest shareholder. Mentor Graphics provides electronic design automation software and hardware solutions to automate the design, analysis and testing of electro-mechanical systems, electronic hardware and embedded systems software. The shares closed Friday at $18.99.

Blackrock Inc. (NYSE: BLK) had the chief operating officer and a managing director at the company selling shares this past week. The pair parted with a total of 13,783 shares at prices that ranged from $311.00 to $319.29. The total for the trade came to $4.4 million. BlackRock is a publicly owned investment manager that primarily provides its services to institutional, intermediary and individual investors. It also manages accounts for corporate, public, union and industry pension plans, insurance companies, third-party mutual funds, endowments, foundations, charities, corporations, official institutions and banks. And it provides global risk management and advisory services. The shares closed on Friday at $313.92, so the timing looks solid.


United Parcel Service Inc.

(NYSE: UPS) had a director at the company deliver some shares of the stock to the trade desk for a sale last week. That director sold a total of 33,713 shares of the company at $97.57 apiece. The total for the trade came to $4.4 million. UPS, a package delivery company, provides transportation, logistics and financial services in the United States and internationally. The stock closed on Friday at $97.44.

Hasbro Inc. (NYSE: HAS) saw a director at the company selling in a big way this past week. That director parted with a total of 585,000 shares of the stock at prices that ranged from $71.86 to $72.47. The total for the sale came to a whopping $43 million. Hasbro and its subsidiaries provide children’s and family leisure time products and services worldwide. Its product offerings include various toys, including action figures, vehicles and playsets, electronic toys and games, plush products, preschool toys and infant products, electronic interactive products, creative play and toy-related specialty products. The stock closed Friday at $76.45, so a little early on the sales trigger it would seem.

Lear Corp. (NYSE: LEA) had a large group of executives selling shares. The CEO and six additional officers at the company sold a total of 286,351 shares at prices that ranged from $103.13 to $105.02. The total for the group sale came in at $30 million. The company designs, develops, engineers, manufactures, assembles and supplies automotive seating, electrical distribution systems and related components, primarily to automotive original equipment manufacturers worldwide. The stock closed Friday at $101.78, so this sale looks very well-timed.

These companies also reported insider selling this past week: American Airlines Group Inc. (NASDAQ: AAL), Blackstone Group L.P. (NYSE: BX), Darden Restaurants Inc. (NYSE: DRI), Hawaiian Holdings Inc. (NASDAQ: HA), Lockheed Martin Corp. (NYSE: LMT) and Vocera Communications Inc. (NYSE: VCRA).

As mentioned, the return of insider selling indicates that the market has firmed to the point at which insiders feel comfortable selling shares. While it is always nicer for shareholders to see insiders buying, this at least reflects an improving market. After a brutal start to 2016, that is somewhat refreshing.