A week or so ago, someone on this board posted his concerns about insider selling of INFN at $18 to $19, which (I think I remember), influenced him to sell his shares. - Saul
Saul then went on to discuss AMBA. I don’t own AMBA and have no interest. My post was specifically about Infinera (INFN). Here’s my OP:
Given that it’s my understanding that at least several board regulars have invested in INFN, I felt it was time to move past generalizations and Wall Street nostrums and actually consider a few FACTS.
As stated in my OP, I was a contented INFN investor and was steadily buying shares. Then, this popped up on my screen:
Director Hooshmand Kambiz sold 100,000 shares of Infinera Corp. stock in a transaction dated Friday, April 24th. The stock was sold at an average price of $19.38, for a total transaction of $1,938,000.00. Following the completion of the sale, the director now directly owns 35,234 shares in the company, valued at approximately $682,834.92.
Wait. What? Hooshmand Kambiz is the Chairman of the Board!
Then I saw this:
President David F. Welch sold 30,000 shares of the stock in a transaction dated Monday, April 27th. The shares were sold at an average price of $20.40, for a total transaction of $612,000.00. Following the completion of the transaction, the president now directly owns 14,132 shares in the company, valued at approximately $288,292.80.
Huh? Dr. David Welch is the founder and President! OK, these news bits definitely grabbed my attention. Decided to do a bit o’ research:
I didn’t like what I was seeing. I discovered there were significant insider sells this past year and the past three months. We can now add Tom Fallon to the list of significant sellers.
OK. Time to dive a bit deeper. Yahoo offers nice summary tables:
Again, I didn’t like what I was seeing, so I dove deeper. My “Go-To” site for insider trading info is MarketWatch:
I like this site because it names names and presents the record of insider trades. The stock chart allows one to trace insider trades along with stock prices. As one can see, the sheer volume of insider stock sales drove down the stock price in late April/early May. I’m not a big fan of insiders actually depressing the stock price. Just sayin’.
One of the features I like about MarketWatch’s data, is that one can click on the name of an insider and review the history of trades. Let’s take a look at Tom Fallon’s trades. Tom’s the CEO (and he’s been selling quite a few shares)!
I’m not liking this at all. Here’s how Thomson Reuters/Verus described the INFN insider activity (Sorry I can’t provide a link. I can access it via my Fidelity research tools…for those with comparable research resources, look for the June 1, 2015 report). Here’s their summary:
Infinera Corporation’s most recent quarterly sell total of $7,377,338 represents the highest level of Q2 selling at the company over the past five years.
A recent #3,929,900 sale by Thomas J. Fallon represents the largest sale at Infinera Corporation in five years.
So spare me the platitudes and nostrums. The BIG DAWGS at INFN are selling waaay more shares than one typically sees in the ranks of TOP DAWGS (i.e., Founders, Chairmen and Presidents). The reason I posted my OP is that I found this activity most unusual.
I reacted by selling half my shares. I now hold a 3% position in INFN. Given that I’m not sure what to make of these sales, I’m still willing to hang on to those shares. On the other hand, given that they still bear unrealized gains, it wouldn’t take much for me to cash out and harvest the gains.
For those believing INFN is on the cusp of a significant break to the upside, I’ll be hoping, too. Unfortunately, the insider trades indicate that the Top Dawgs aren’t exactly on board with that.