A group of eight Intel (INTC) insiders have proposed to sell more than half a million shares at a time when the chip giant's stock is rallying, raising the question of whether they view the boon as short-term.
The Intel insiders, along with a handful of executives and directors at companies ranging from Gateway (GTW) to Compaq (CPQ), have filed to sell their company shares during the last few days, according to filings with the Securities and Exchange Commission.
Among those at Intel looking to unload a total of 578,500 of their shares are Craig Barrett, the company's president and chief operating officer; Frank Gill, executive vice president and general manager of its Internet and communications group; and retiring director Max Palevsky. Barrett has filed to sell 100,000 shares, Gill 390,664 shares, and Palevsky 50,000 shares.
"This is the third round in the last year of aggressive selling at Intel," said Craig Columbus, insider analyst with Disclosure, a provider of financial intelligence. He noted that the first two rounds of selling, in late summer and then in fall, came at times when Intel's stock was flat or on a downward trend. This most recent round of selling, however, has insiders planning to sell their stock at a time Intel's share price is rallying, and has been doing so for over a month.
"The sell-off in the current round comes as the stock is rallying," said Columbus. "I would like to see more patience. This says there are concerns about the current strength in the persistence of the rally."
Intel's stock has been climbing steadily of late, from around 70 a share in late December to close at 87-35/64 today, up 1-3/64 a share over yesterday's close.
Despite the upside, the chip giant has said that its first quarter likely will encounter flat revenues, and that the company will see lower profit margins throughout the year. Intel had cited higher costs to manufacture its Pentium II processor as cutting into its profit margins.
Like many public companies, Intel has designated periods, known as windows, during which insiders are allowed to sell and buy shares. Robert Manetta, an Intel spokesman, said the company does not comment on insider sales, but Columbus noted that the previous two rounds of insider selling had sales volumes similar to the current round.
In related news, six insiders at direct-sales computer company Gateway have proposed selling 1.2 million shares. Theodore W. Waitt, the company's chief executive, accounts for 1.1 million of those shares, Columbus said, noting that Waitt's proposed sale represents a mere drop in the bucket of his total holdings in the company--over 68 million shares.
Gateway, which previously had been hit with a significant loss and layoffs, showed improved financial standing when it reported its fourth-quarter results last month. The company posted an increase in its revenues and profits over the previous year, and its stock, which has been climbing since November, when it was in the mid-20 range, closed at 40-3/4 today, up 1-1/16.
Three Compaq insiders are proposing to sell a total of 234,984 shares. The company?s director, John White, wants to sell 62,502 shares, while Roel Pieper, who recently resigned as senior vice president and general manager of worldwide sales, is looking to sell 137,898 shares. The computer giant has seen its shares rise from around the high 20s in late December to close at 35 today, down 3/16 from yesterday.
The former CEO, who was ousted last July, sold 150,000 of his shares not too long ago. Between that filing and the current one, he is looking to get rid of 340,000 shares that account for $1.3 million of his holdings.
Informix, which has experienced a tough run during the past year, has had to restate its financial results, and subsequently post losses, for the past several years.
(Intel is an investor in CNET: The Computer Network.)