In the past few weeks the stock market has surged nearly as much as it fell off back in August, leaving many people with the feeling that “we’re back.” Even the insiders as a whole are growing more bullish, although they’re still giving off neutral signals for the moment.
That’s why I’m even more intrigued by two blue chip stocks that are being dumped by insiders despite strong action lately.
Let’s look at what these stocks are and why they’re being bailed on…
Have you ever heard of Facebook? What about Nike?
Virtually everyone has heard of both of these blue chips, and as you might expect even if you haven’t been paying close attention to them, they’re both over $100 per share.
In fact, Facebook stock (FB) just climbed over the $100 mark for the first time to end last week’s trading…
And Nike stock (NKE) has surged to over $130 per share over the past several weeks.
So why then are insiders – the company officers, directors, and 10% owners – now deciding to dump these stocks just as the market finally been able to experience some sustained growth?
Here’s what I’m talking about…
- FB – 6 company insiders sold more than 135,000 shares for a total value of $13 million
- NKE – 2 insiders sold more than 100,000 shares for a total value of $13.6 million
Perhaps these insiders are pulling their money out to spend on other things. There are thousands of reasons to sell stock compared to just one reason to buy it. Yet it would be a strange coincidence to see multiple insiders selling so heavily at once, especially for 6 insiders of FB.
Perhaps the looming earnings reports for both companies are expected to be less than adequate by these insiders who are looking to protect their money. FB reports earnings on November 4th. NKE reports earnings on December 17th.
Or perhaps this latest market surge is just Wall Street’s way of artificially raising prices again so that the “pros” have a chance to sell off assets before everything plummets again. That would explain these 2 blue chips being dumped so abruptly by insiders.
But one thing is for sure – I’m not betting my money on either of these 2 stocks while the insiders of those very companies aren’t willing to do so…
