If there was ever an indicator that the market is getting too rich, it may be insider selling, and we continued to see a landslide of such selling last week. While it isn’t surprising at these elevated levels, the sheer difference in volume with insider buying is starting to become so lopsided that it may be a warning sign to investors that the time to tap the proverbial brakes may be upon us.
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 sells stock, that is no cause for immediate alarm. Many top executives, and even directors, are compensated with stock and often sell just to diversify portfolios or purchase other assets.
Here are companies that reported notable insider selling this past week.
The huge selling at MasterCard Inc. (NYSE: MA) this past week came from none other than the company’s own foundation. The MasterCard foundation sold a total of 136,690 shares of the stock at prices that ranged from $109.44 to $109.50. The total for the sale was posted at $14,963,461. Shares of the credit card giant closed Friday at $109.84. The 52-week trading range is $78.52 to $111.07, and the Wall Street consensus price target is $120.02.
The president and CEO of Adobe Systems Inc. (NASDAQ: ADBE) parted with some of the stock in the past week. Shantanu Narayen sold a total of 173,703 shares at a $113.91 apiece. The total for the sale was listed as $19,787,246. Note that the stock closed trading last Friday at $113.99, in a 52-week range of $71.27 to $114.57. The consensus price target is $122.76.
Charles Schwab Corp. (NYSE: SCHW) saw President and CEO Walter Bettinger selling shares again this past week. The 325,000 shares sold at $42.31 apiece totaled a whopping $19,787,246. The discount brokerage pioneer’s shares also closed last Friday at $42.31. The 52-week trading range is $21.51 to $42.61. The consensus price objective is $46.
Another company that saw the man at the top selling stock last week was Salesforce.com Inc. (NYSE: CRM). Keith Block, who is the vice chairman and the president of this top enterprise cloud computing solutions company, parted with a total of 150,000 shares at $78.00 a share. The total for the sale was posted at $11,700,000. The stock closed Friday at $78.21, in a 52-week range of $52.60 to $84.48, and with a consensus price target of $94.44.
Transportation and shipping giant FedEx Corp. (NYSE: FDX) had its chief information officer selling stock last week. Robert Carter shed 34,580 shares at a price of $191.22. That reportedly netted him $6,612,388, but some money appears to have been left on the table, as the ended last week at $195.92. Its 52-week trading range is $122.78 to $201.57, and the consensus price target is $210.10.
These companies also reported insider selling last week: BB&T Corp. (NYSE: BBT), Corning Inc. (NYSE: GLW), Procter & Gamble Co. (NYSE: PG), Netflix Inc. (NASDAQ: NFLX) and Western Digital Corp. (NASDAQ: WDC).
The bottom line for investors is caution. We could push a little higher, but with markets at all-time highs and insiders selling like crazy, it makes sense to be very careful. In theory, a solid correction could help make the markets much better as we roll through 2017.