This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Hewlett Packard Insiders Underwater on Sinking Stock

Stocks in this article: FB HPQ

NEW YORK ( TheStreet) -- It makes intuitive sense.

When insiders sell stock, there must be something wrong. When they buy, they're sending bullish signals because they know something we don't.

I subscribe to the Seinfeld perspective on intuition: The little man inside of you doesn't know all; in fact, there's a better-than-zero chance that your little man is an idiot.

>>Also see: SEC Should Keep Close Eye on HP, Whitman

Everybody likes to dog IPOs. Take Facebook (FB - Get Report) for example.

Every hysterical non-visionary and his buy-and-hold grandmother warned the stock would tank on lockup expiration. Didn't really happen. In fact, FB went on one hell of a run over the last two weeks -- up roughly 25%.

Lockup-associated or not, you have to understand how insider selling on these stocks rolls.

If you look up insider transactions for just about every big name company (and many small), you'll find selling. Tons of it. And it tends to happen without regard for the direction the stock is headed or the prospects of the company that floats the paper.

Most insiders sell as part of their compensation packages, particularly at relatively young and/or tech companies.

Look at Facebook COO Sheryl Sandberg -- like any other insider, the SEC makes her moves public. She's executing regular automatic sales that she probably doesn't even pay much attention to. It's not like Sandberg logs in to ETrade hemming and hawing over the price she gets for her 169,000 share lot of Facebook.

There's nothing nefarious about her selling. Forget that she still owns like two million shares. That doesn't even matter. She's selling because that's part of the game. Good company, bad company, good IPO, bad IPO -- insiders sell to get rich or, in Sandberg's case, richer. Don't read into it.

By contrast, man a-freaking-live, I hope you didn't take cues from recent insider buying at Hewlett Packard (HPQ - Get Report).

Over the last six months, a couple of insiders on HP's board gobbled up shares at prices ranging from approximately $21 to $23.

According to SEC filings, it appears that HP's executive chairman of the board, Raymond Lane picked up nearly 250,000 shares of HPQ in that ballpark over multiple buys.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,239.34 +47.97 0.28%
S&P 500 1,999.24 -2.92 -0.15%
NASDAQ 4,626.4480 -11.5460 -0.25%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs