Insider Trades Can Tell A Story

What’s it mean when the executives buy or sell a bunch of stock in their company? The following article discusses just that and has some interesting insights you may be able to use to plan your next option trade. They also list a number of insider trades that happened yesterday.

We present here three noteworthy buys and 11 noteworthy sells from Wednesday’s (March 21st, 2012) SEC Form 4 (insider trading) filings, as part of our daily and weekly coverage of insider trades. These were selected by a review of over 315 separate SEC Form 4 transactions filed by insiders on Wednesday. The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):

Gap Inc. (GPS): GPS operates 3,246 Gap, Old Navy and Banana Republic apparel stores worldwide. On Wednesday, EVP Gavin Sage filed SEC Form 4 indicating that he exercised options to acquire 226,250 shares and sold those and an additional 42,732 shares for $7.0 million, ending with no shares after the sale (not including derivative holdings). Insider selling has picked up recently at GPS, with 0.65 million shares reported sold so far in March, in addition to the 0.63 million shares reported sold in the entire month of February. In comparison, insiders sold only an additional 0.08 million shares in the remaining 10 months of the past year.

The acceleration in insider selling activity is happening at a time when GPS shares have strongly rallied, up over 40% YTD, on the back of a good Q4 report last month in which it reported…

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