Any time a group of insiders within a company simultaneously liquidate positions in their own company, investors tend to take notice. Whether senior managers decide to divest of holdings due to needing to raise personal capital, exercising stock options, or believing the company may be headed in a particular direction, looking for signals in the fray of public information available is an important thing for investors to do.
Three senior executives from Magna International Inc. (TSX:MG)(NYSE:MGA) sold shares this past month, led by CEO Donald Walker who sold more than 288,000 shares in November for total proceeds of more than $19 million (he still owns approximately 1.2 million shares, making his holdings in Magna worth more than $85 million at the time of writing. In addition to Mr. Walker, CFO Vincent Galifi and EVP HR Marc Neeb sold 70,000 and 43,332 shares, respectively, in the month of November.
With Magna's share price on the rise, the execution of stock options by senior management should not come as a surprise. Despite a relatively attractive valuation (TTM P/E ratio hovering below 10 currently), a strong case can be made for these leaders to hold onto shares; that said, taking money off the table is rarely a bad idea.
Invest wisely, my friends.
