Cashing in from the inside out
Technology executives were busy in February, cashing in on the market advance that followed October lows, at a time when concerns surrounding the Asian financial crisis and potential inventory gluts still lingered.
Since the beginning of the year, share-shedding by computer software insiders has outpaced that of all other technology-related industries, in terms of both the number of insider filings and the number of shares sold.
The month also was marked by some by unusual buying among insiders at chipmakers Altera(ALTR) and Lam Research(LRCX), as well as at storage maker Iomega (IOM) .
But first, the sellers. During February, several software companies reached 52-week highs, and executives at those companies quickly jumped to collect their profits.
Executives and directors at Yahoo(YHOO), for example, proposed to sell a total of 249,648 shares at $61.63 to $66 per share. Arthur Kern, a member of the company's board of directors, sold 25,000 shares.
Yahoo stock has experienced a terrific run, which makes the timing of the recent insider distribution at the search engine company especially noteworthy. The insiders chose to sell during a market rebound, but had refrained from selling when the stock advanced during the second half of 1997.
All this selling--in every case driven by insiders electing to capitalize on record market highs--extended to Cadence Design (CDN), where 312,000 shares were unloaded; Siebel Systems(SEBL) where 468,882 were sold; and BMC Software(BMCS) which saw 301,300 shares put up for sale.
Insider distribution among tech issues was not isolated to software makers. Executives at computer hardware and semiconductor companies also sought to lock in their profits while the getting was good.
Quantum(QNTM) executives, for example, sold 606,096 shares in late January. CEO Michael Brown led the group in the number of shares sold, selling 375,000 shares at $22.41 each.
Additionally, the strong run-up in share price for PC maker Gateway 2000 (GTW) likely triggered six insiders there to reduce their collective holdings by 1.2 million shares.
Finally, the Street's enthusiasm for the planned merger of Compaq (CPQ) and Digital Equipment (DEC) may have motivated seven insiders there to sell 818,320 shares near the stock's 52-week high.
Not to be left out, semiconductor insiders capitalized on the rally as well. They sold shares on price spikes at Dallas Semiconductor (DS), with 215,000 shares sold at a range of between $43.50 and $45.81 a share, while Maxim Integrated Products (MXIM) insiders sold 515,000 shares at a range of between $33.88 and $35.44 a share. Not one to be left out, chip giant Intel (INTC) saw its executives unload 578,000 shares at a range of between $74 and $81 a share. (Intel is an investor in CNET: The Computer Network).