It can be hard to know which period to start with and what is the most important criteria to evaluate for potential insider selling candidates. A good approach to take is to find the most sold stocks for a particular week and then dig in. The S&P 500 is a good place to start for opportunities since they are typically large company and are actively traded. Looking back at last week, Fortive Corp (NYSE: FTV) came in second as the most-sold stock on the S&P 500 in terms of trade value.
Fortive manufactures professional instrumentation and develops software to be used in testing, calibration and thermal imaging. The company reported the quarterly earnings on July 28 and beat analyst expectations of $0.58 earnings per share with a $0.68 per share profit. Since the report, they have seen upgraded expectations for the upcoming quarters and fiscal years. This seems like a positive, but the share price has failed to gain any real bullish traction since the report.
Last week, FTV had three insider sales transactions from three different people totaling nearly 5 million shares. Virtually all of the value sold came from Mitchell Rales, director, who sold over half of his holdings in the company. The 4.9 million shares sold reduced his position to a little over 4 million. These sales came after Steven Rales, director, sold 3.6 million shares on August 5, which reduced his holdings to just over 13 million.
Action to Take: With only 1.81% insider ownership, this doesn’t show a lot of alignment with corporate objectives, but it is an indication of a willingness to take profits here. The positive surprise and upward guidance make this company a long opportunity to retest its high near $80 or a short opportunity if it closes below $70 on above average volume.