Huge selling off by insiders of one particular big-name company could point toward the imminent demise in share price.
If you own this stock, you’re money could be at risk. If not, there could be a great chance to profit if the insiders are leading us in the right direction.
Let’s look at what the insiders are doing and how you could soon make some nice profits from this situation…
Dating back to 2013, Netflix, Inc. (NFLX) has climbed from below $30 a share all the way up to over $110 per share. That’s a gigantic gain of over 260%!
But now some company insiders are hinting that NFLX’s magical run could soon be coming to a close. And for a stock that’s gained that much, the “end” could mean a monumental drop in share price.
Let’s look at some of the facts.
As a general overview, NFLX engages in the Internet delivery of TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally. The company operates in three segments: Domestic Streaming, International Streaming, and Domestic DVD.
This Internet television network also provides DVDs-by-mail membership services. The company has approximately 57 million customers in approximately 50 countries.
In the past week or so of trading, the price of NFLX has bounced between $105 and $115 per share.
That’s all well and good, but when we dig a bit deeper we can see some intriguing information…
In the past 6 months, NFLX has experienced exactly 0 insider purchases and 24 insider sales. While you should expect significantly more sales than purchases from the officers, directors, and 10% owners of any company, the 0 to 24 ratio in this case is staggering.
Yet NFLX has continued to climb in the past 6 months, so what’s new about right now?
For starters, 4 new insider sales were reported in the past week for NFLX. Those totaled in the amount of approximately $20 million. That’s a lot no matter what company it is.
2 insiders selling at the same time could be a coincidence. 4, however, is very unlikely to be.
So why are these insiders selling when the stock itself appears to be in good shape?
Well, when several insiders take action at the same time, a likely reason is that they all know some piece of privileged information about their company that leads them to believe the share price will soon be dropping.
So this could very well be a defensive move on the part of the insiders, and a loud warning for everyone who’s paying attention to them.
If you own NFLX shares, be careful. In the immediate future, a drop in share price below $105 could be the beginning of a heavy selling off. And whether you own NFLX or not, any big drop means there’s a good opportunity for you and I to profit.
If that time comes, our best services will be ready to act.
