Why should investors track insider moves? Is it a bad sign for the company when insiders sell their shares? Not necessarily; just like insider buying activity doesn’t always mean the stock is heading for growth. Both insider selling and buying can be driven by various motives, it's important to consider these moves within the broader context of the company’s fundamentals, industry trends, and overall market conditions.
However, insiders or people in high positions within a company—such as executives and directors, often have precious insights into the company’s strategy, plans, next moves and initiatives. Sometimes, for example, when a CEO or CFO invests their own money to acquire company shares, it can signal strong confidence in the company’s potential.
Similarly, when insiders are selling their shares, it can sometimes mean that the management is losing confidence. On the other hand, it also happens that large shareholders just want to trim their holdings to more appropriate position sizes based on the risk/reward. Insiders can also decide to sell their shares due to personal financial reasons that have nothing to do with the company.
This means that both insider selling and buying can be driven by various motives, and therefore, any insider trading activity should be carefully analyzed only with other factors. That’s why due diligence before any investment is of the utmost importance. However, insider trading activity in combination with other relevant determinants can offer valuable insights into a company’s capabilities, helping investors make more informed investment decisions.
To identify the 10 large-cap stocks insiders are selling recently, we considered only stocks with a market capitalization of more than $10 billion. We first used Insider Monkey’s insider trading stock screener and looked for stocks with at least two insiders selling over the last two months.
With each stock we note the number of recent insider sales and the company’s current market capitalization. But why is it important to follow insider activity? Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here)
Is Intuit Inc. (INTU) The Best Stock To Buy For Financial Stability?
A professional tax preparer, using a laptop to complete an income tax return.
Intuit is a California-based financial technology company. Its most popular products include TurboTax, the tax preparation application, Credit Karma, the credit monitoring and personal accounting service, and QuickBooks, an accounting program for small businesses among others. Intuit has offices in seven countries.
Over the last two months eight insiders, including CEO, President and Director, and CTO, sold around $186.43 million worth of Intuit shares at an average price of around $639.79 per share. The stock is currently trading at $585.88, having lost 6.78% since the beginning of the year.
According to data from StockAnalysis, 21 analysts have an average “Buy” rating on Intuit stock, and a 12-month price target of $726.45. Over the last 12 months, Intuit shares dropped 10.82%, while over the last five years they grew 92.54%.
For the full fiscal year 2024, the company disclosed revenue of $16.3 billion, up 13% year-over-year. Operating income amounted to $3.63 billion, up 16% from $3.14 billion in the fiscal 2023. Earnings per share were $10.43, which compares to $8.42 earnings per share in the prior year.
In December, Intuit entered into a multi-year partnership across Canada with the Professional Women’s Hockey League (PWHL), naming Intuit QuickBooks as the league's Official Accounting Software Partner.
More recently, the company announced the launch of its national Financial Literacy Forum series and Hour Finance Challenge in partnership with the NFL’s Inspire Change initiative and the New Orleans Saints. The goal of the forum is to provide basic financial skills to local students in an interesting way.
Why did Intuit shares decline over the last six months 6.62%? Some analysts attributed the recent decline of Intuit stock to the news of President Donald Trump’s new Department of Government Efficiency (DOGE) considering the launch of a free tax filing app. Furthermore, there are concerns about the AI stock market bubble, and market saturation. Despite this volatility in the tech and AI sectors, AI remains the future, and Intuit is also considered one of the 10 Unrivaled Stocks of the Next 5 Years.
Overall INTU ranks 10th on our list of the large-cap stocks insiders are selling recently. While we acknowledge the potential of INTU as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than INTU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
