• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

In the Lull Between Earnings Seasons, Keep an Eye on Insider Selling

A key data point to watch, now that corporate blackout dates have come and gone, is insider selling activity.
By CHRIS VERSACE
Mar 10, 2019 | 03:30 PM EDT
Stocks quotes in this article: EL, MTD, PG, DATA, TTD

Even though the December-quarter earnings season is only really winding down now, we have just over three weeks until the current quarter comes to an end. Soon after, the March-quarter earnings season begins.

Generally speaking, such lulls see investors triangulating what was learned over the last several weeks with the latest information and other cues to prepare for what's likely ahead. As we've talked about in recent Roundups, a growing concern is U.S.-China trade talks may not live up to the expectations being set by the White House.

Despite Tuesday's favorable ISM Non-Manufacturing Index data for February, as we've discussed, the aggregate data points of late show a slowing U.S. and global economy. We were reminded of this today when the OECD cut its 2019 global economic growth forecast to 3.3% from 3.5%, with some of the larger cuts in Europe, and updated its 2020 outlook as well. While the U.S. outlook was lowered slightly, the U.K.'s 2019 forecast was reduced to 0.8% from 1.4%, and Germany's to 0.7% from 1.6%.

To be fair, the OECD tends to be a few steps behind the market data, and while it is a tad late in making these cuts, there are those that are taking note. The same can be said for the Federal Reserve's latest Beige Book, the central bank's anecdotal data from its regional banks, that will be shared this afternoon. Odds are employment and order commentary will be of keen interest to economists and investors like ourselves.

In terms of those other data points to watch in the coming few weeks, we will see the usual spike in investor conferences that tends to happen in between the earnings blitzkrieg and the end of the quarter lull. During these presentations, management comments and their tone will be sized up vs. what was shared earlier in the quarter to determine if anything has meaningfully changed.

Another key data point to watch for, now that corporate blackout dates have come and gone, is insider selling activity, especially given the year-to-date market rise vs. the slide in 2019 consensus EPS expectations for the market. Inside the data, we're looking for indications that at the margin the tone of the business may be somewhat less than was expected previously. The data is publicly available via Form 4 filings with the SEC. However, it takes some detective work to put the pieces together.

Over the last month, we've seen meaningful insider selling activity at Estee Lauder (EL) , Mettler Toledo (MTD) , Procter & Gamble (PG) , Tableau Software (DATA) , The Trade Desk (TTD) , and a number of others. There can be a number of reasons why individuals as well as insiders sell stock. When examining the data, what we're looking for is selling by more than one or two insiders and something of size in aggregate rather than a few hundred shares. For example, in the last month, four c- suite executives at Trade Desk sold just under 486,000 TTD shares, with 89% of those sales coming between $194-$199, and now TTD shares are trading several dollars below that range.

In the coming weeks, we'll continue to keep tabs on insider selling as well as insider buying activities across the active portfolio to fine tune our positions sizes as well as help identify potential new positions.

This commentary was originally sent March 6 to subscribers of TheStreet's Stocks Under $10 portfolio. Click here to learn more about this portfolio, trading ideas and market commentary product.

Chris Versace and Stephen "Sarge" Guilfoyle are co-portfolio managers of Stocks Under $10.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Versace had no positions in any securities mentioned.

TAGS: Earnings | Economic Data | Economy | Fundamental Analysis | Investing | Stocks | Stocks Under $10 | U.S. Equity

More from Stocks

The Markets Also Rise Quickly

James "Rev Shark" DePorre
Mar 1, 2021 4:22 PM EST

Fear of missing out permeated the day as the indexes bounced back.

BlackBerry's Calling

Mark Sebastian
Mar 1, 2021 3:27 PM EST

Here's a play in the stock and why I think it will dial back down.

NantKwest's Charts Are Extended When Compared to the Popular Moving Averages

Bruce Kamich
Mar 1, 2021 3:15 PM EST

Let's stand aside for now and see how things unfold.

The Battle Over Cannabis Operator Verano Holdings' Stock

Debra Borchardt
Mar 1, 2021 2:00 PM EST

Sol Global and MMCap are fighting in court over who owns or owes what of the company's shares.

Is Chevron Finally Ready to Make an Upside Breakout?

Bruce Kamich
Mar 1, 2021 1:44 PM EST

Let's check out some charts on the energy giant.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 06:05 PM EST PAUL PRICE

    Michael's (MIK) up on take-over rumors

    The NYT says talks are underway regarding a buyo...
  • 08:09 AM EST GARY BERMAN

    Monday Morning Fibocall for 3/1/2021

    Always a good idea to know where our bounce zones ...
  • 11:51 AM EST REAL MONEY

    Watch Bob Lang and Doug Kass Discuss Short-Selling!

    Bob Lang and Doug Kass with an engaging and educat...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login