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TheStreet Open House

6 Stocks With Big Insider Activity

Stock quotes in this article: PCBC, FMBI, FSC, PX, WAT, EQR

Fifth Street Finance

One more bank stock that has seen some notable insider buying recently is Fifth Street Finance (FSC). The CEO just bought 22,000 shares or $270,844 worth of stock, at an average price of $12.30. This finance company lends to and invests in small and mid-sized companies in connection with investments by private equity sponsors. So far in 2011, this stock has pretty much done nothing, trading flat with an increase of just over 1%.

From a technical standpoint, the stock recently fell below its 50-day moving average of $12.97 a share. The 200-day moving average sits at around $11.60 a share. Only buy this name if it can show some buying support above that 200-day average, otherwise it could easily fall to its next significant support area at around $10.74 a share.

Fifth Street Finances is one of the top-yielding financial services stocks, with a yield of more than 10%.

Stocks With Notable Insider Selling

The top five stocks on the insider selling list for this reporting period were Google (GOOG), with over $45 million worth of selling; Praxair (PX), at around $43 million; Waters (WAT), at $27 million; Campbell Soup (CPB), at close to $27 million; and Equity Residential (EQR), at over $24 million. The amount of selling in these five leading stocks totaled around $167 million.


One company out of this group that saw some selling done by key insiders was Praxair, an industrial gas supplier in North and South America and one of the 20 top-yielding chemicals stocks. Praxair's primary products for its industrial gases business are atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases, acetylene). The stock has done decent so far in 2011, with shares up around 8%.

Over half of the selling at Praxair came from the company's president and CEO, who exercised options that amounted to 250,000 shares or $26.58 million worth of stock at an average price of $106.80. The company's CFO and general counsel also exercised some options that amounted to million worth of sales in their stock.

From a technical standpoint, traders should watch how this stock behaves at around it 50-day moving average of $101.83. If it trades below that price with heavy volume, then I would avoid this name. I would consider any selling volume that pushes the stock through that level that's above the three-month average of 1.4 million shares as heavy.

One big bullish bet on Praxair comes from RS Investment Management, which had a 3.1 million-share position in the stock as of the most recent period.

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