Are insiders selling at the right time?

Sean BowerI can tell you that I was a bit surprised to see a huge amount of insider selling for one particular company this past week.

That’s because this company’s stock has been one of the strongest gainers over this bull market, climbing from $30 all the way up to $180!

But this insider action simply cannot be ignored, and this stock that you could very easily own could be in trouble…

Normally I don’t pay too much attention to some insider selling. As I’ve said before, insiders could sell for any number of reasons they may need cash for while they only buy their own stock because they think it will go up and they want to profit.

But when I saw 6 insiders making significant sales of stock in their own company, it became apparent that this wasn’t a coincidence or something I could overlook.

And when I saw that the selling was occurring for Illumina, Inc. (ILMN) I became very intrigued.

Like I mentioned before, ILMN has been one of the strongest stocks in the market over the past 2+ years. All you have to do to see that is look at a chart of ILMN from Stockcharts.com:

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But this chart also shows us that ILMN has plateaued since the beginning of this year…

So is the price stall scaring the insiders off or have they just learned a new piece of information that they believe will send the price of ILMN down?

Well if there is some new information, it certainly hasn’t become public yet. Everything appears positive for ILMN

One look at ILMN’s income statement shows great annual gross profit data, and the quarterly data is even better!

It seems that all the recent information for this biotechnology company in the healthcare sector is good, but the insiders have sold more than $10 million-worth of shares.

No matter why they are selling right now, ILMN is in a very vulnerable position at the moment.

If this insider selling pushes the price of ILMN down much more, it could be ready to drop for quite awhile. If this insider selling doesn’t impact the price and ILMN stays strong, it could be a sign that ILMN isn’t done climbing yet.

I’m ready to let the insiders lead us to profits, but only when the stock shows me that the insiders are correct.

The important part is the timing involved in buying and selling, which you can learn through our Stock Code Breaker course.

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