Corporate insiders are making billions of dollars selling the stock of the companies where they work.
No, this isn’t the type of insider trading that would land anyone in prison. Executives and other employees can sell shares of their companies in a few different ways for various reasons.
Sometimes insiders will have structured plans, known as a 10b5-1, that automatically sell off some of the shares that are part of their compensation.
Insiders can also sell off stocks as long as they are not using information the public does not have as well. For example, they could think the market is at its peak or simply want to transfer their assets from stocks to cash so they can buy a yacht or something.
In order to ensure that all of these sales are aboveboard, insider sellers must register the transactions with the Securities and Exchange Commission (SEC) via a Form 4. Sqoop, a service that analyses public records including SEC forms, complied lists of the 40 companies and industries that sold off the most since the start of 2015.
17 companies sold off more than a $US1 billion in stocks through May of this year and the 40 largest sellers Sqoop complied made a little over $US50.7 billion.
The largest insider sellers were from Brixmor, a commercial real estate company, who sold more than $US6.6 billion in stock since the start of the year. Directly behind were foodservice supplier Aramark and human resource software provider Paycom Software, with $US4.8 and $US3.7 billion respectively.
“It is worth noting that in the case of Brixmor, the most significant Forms 4 are sales that represent payments to other investment entities, not individuals, which very likely could be the routine manner by which they return proceeds to their investors,” Sqoop’s Bill Hankes explained.
Real estate also topped the list of industry total sales, with insiders at real estate investment trusts or REITs, selling $US8.8 billion in stocks. Restaurant insiders sold $US6.3 billion in stocks, while all other retail combined sold just under $US7 billion.
The top industries and companies as pulled by Sqoop are below.
Industries whose Insiders Sold the Most Stock, January — May 2015
|Rank||Industry [SIC]||Amount US$|
|1||REAL ESTATE INVESTMENT TRUSTS ||8,782,738,686|
|2||SERVICES-PREPACKAGED SOFTWARE ||7,702,485,324|
|3||RETAIL-EATING PLACES ||6,260,383,968|
|4||SERVICES-BUSINESS SERVICES, NEC ||4,491,939,140|
|5||SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. ||3,099,260,968|
|6||SEMICONDUCTORS & RELATED DEVICES ||3,091,875,203|
|7||WATER TRANSPORTATION ||3,028,441,997|
|8||RETAIL-DEPARTMENT STORES ||2,334,291,713|
|9||PHARMACEUTICAL PREPARATIONS ||2,296,445,955|
|10||SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH ||1,762,798,332|
Companies whose Insiders Sold the Most Stock, January — May 2015
|1||Brixmor Property Group Inc.||6,676,365,550|
|3||Paycom Software, Inc.||3,837,106,198|
|4||Burlington Stores, Inc.||2,221,916,262|
|6||Freescale Semiconductor, Ltd.||1,741,771,218|
|7||Pinnacle Foods Inc.||1,588,666,025|
|9||Michaels Companies, Inc.||1,437,415,665|
|11||IMS Health Holdings, Inc.||1,407,193,758|
|12||SERVICEMASTER GLOBAL HOLDINGS INC||1,298,130,404|
|13||Norwegian Cruise Line Holdings Ltd.||1,274,987,500|
|14||Endurance International Group Holdings, Inc.||1,235,101,088|
|15||Quintiles Transnational Holdings Inc.||1,229,081,415|
|16||EnLink Midstream Partners, LP||1,222,973,272|
|17||Axalta Coating Systems Ltd.||1,161,465,534|
|19||Hilton Worldwide Holdings Inc.||982,702,704|