Insiders Getting Out in October

Updated from 3:25 p.m. ET to include additional information about what sectors have seen the most insider selling.

NEW YORK ( TheStreet) -- October has seen plenty of insiders selling and very few buying, according to data from research firm TrimTabs, which tracks asset flows and market liquidity.

So far this month, insider selling is averaging $178 million worth of transactions per day, the firm said. That's more than double September's daily average of $76 million. Meanwhile, insider buying has been "almost non-existent," TrimTabs notes, coming in at just $8 million per day, less than a third of the year-to-date average of $30 million.

"As the S&P 500 has climbed 12.6% from its closing low on October 3, insider activity has turned extremely bearish," the firm said.

Those numbers result in an insider sell/buy ratio of 21.5 for October, up significantly from ratios of 2.4 in August and 3.1 in September, and the highest level seen since February. TrimTabs said the sectors seeing the most insider sales so far this month are consumer discretionary at $1.00 billion, health care at $451 million, and information technology at $204 million. Month-to-date, selling is still below $3 billion but the activity has already exceeded September's total. From a dollar value standpoint, insider selling for 2011 peaked in March, when it exceeded $13 billion.

Among the companies seeing insider sales this month have been Apple ( AAPL), Ciena ( CIEN), Crocs ( CROX), CBS Corp. ( CBS), Ann Inc. ( ANN), Leapfrog Enterprises ( LF), and SanDisk ( SNDK), to name just a few.

In a Form 4 filed on Oct. 20, Jeffrey Williams, a senior vice president at Apple, details the sales of 10,000 shares received on Oct. 18 following the vesting of restricted stock units. Williams sold 4,668 shares on Oct. 18 at the stock's closing price of $422.24 then sold the remainder on Oct. 19 at prices ranging from $399.55 to $407.86. Williams still owned 213 Apple shares following the transactions, according to the filing.

On Oct. 17 Stephen Alexander, senior vice president and chief technology officer at Ciena, sold 3,500 shares at $12.22 each. Alexander still owns more than 225,000 Ciena shares, according to the filing.

A well-timed sale was executed by Daniel Hart, executive vice president at Crocs, as part of regular options vesting and stock sale activity. Hart exercised an option to acquire 4,167 Crocs shares at $3.99 each on Oct. 17, and sold the same amount of stock the same day for $26.93 per share.

After the market close that day, Crocs issued a surprise warning for its third-quarter results, sending the stock down more than $10 on Oct. 18 to close at $16.15. Hart's sale though was in keeping with past practices as he been executing similar monthly transactions of varying sizes for more than a year. Hart also still beneficially owns more than 100,000 Crocs shares, so he's taken a hit as well.

Les Moonves, the president and CEO of CBS Corp., also engaged in regular options and stock sale activity this month. Moonves acquired 300,000 shares of CBS Class B common shares at $13.09 each on Oct. 17 through the exercise of employee stock options, and then sold the same amount for $22.96 each. He still has significant direct and indirect holdings in CBS, and was selling stock this month under a Rule 10b5-1 trading plan adopted in March and then amended in August.

Katherine Lawther, the president and CEO of upscale women's clothing retailer Ann Inc., reported the divestment of a total of 15,000 shares on Oct. 20, selling 13,200 shares at $25.39 each and 1,800 shares at $26.09 each. The sales were made as part of a Rule 10b5-1 trading plan adopted by Lawther, who still owns more than 385,000 Ann shares following the transactions.

LeapFrog Enterprises, meanwhile, has seen more of the same this month with continued regular selling by an entity controlled by Oracle ( ORCL) CEO Larry Ellison. On Oct. 21, Mollusk Holdings, which controls more than 10% of Leapfrog's outstanding stock, announced the sale of 30,000 shares at $3.52 each. The sale is one of eight same-sized transactions this month alone, and similar transactions have been occurring all year as part of a regular trading plan filed with the SEC. Mollusk Holdings still owns nearly 1.5 million Leapfrog shares, according to the filing.

A big sale earlier in the month came from SanDisk CEO and President Sanjay Mehrotra. On Oct. 10, Mehrotra disclosed the sale of a total of 20,000 shares following the exercise of stock options. Mehrotra bought the shares for $34.59 each and sold 19,900 shares at $44.88 each and 100 shares at $45 each. Mehrotra has indirect ownership of 35,392 SanDisk shares through a family trust.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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