Insiders are selling these hot stocks at higher prices

Insider selling is often a bad sign for stock prices, but it’s not always a bad sign for investors. In most cases, insiderselling is a well-known event limited by regulations and rarely allows a legal escape route from the impending stock price catastrophe. Because insiders are aware of stock-based compensation, most inside sales are tied to it. In this scenario, insiders can sell all they want as long as the market continues to buy, and is buying Coinbase, Procore Technologies, and RXSight, Inc.

Coinbase Global is the most sold stock by insiders

Coinbase Global (NASDAQ:COIN) is in first place as the best-selling title by industry insiders in the last three months. Ten insiders made 31 trades, raising approximately $60 million in proceeds. Sales were made by a wide range, including directors and executives of all stripes. The result is that insiders are still heavily invested and hold more than 33% of the shares, but there is potential risk. An insider, co-founder FE Ehrsam III, is liquidating his position. He has made several sales, including four since January 1, bringing his holding from 500,000 shares to just 6,000.

This risk is compounded by the fact that institutions have been selling the last two quarters. Institutional participation is moderate, equal to 45%, and mainly concerns funds. BlackRock and ARKK Investment are the largest holders. ARKK is a well-known seller that lost more than 20% of its holdings at the end of the fourth quarter of 2023.

However, analyst sentiment mitigates some of the risks. The twenty-two analysts monitored by Insidertrades.com set the stock at a firm Hold and have raised their price targets. Even with the recent price correction, the consensus continues to lag price action, but it is rising strongly and is being driven higher by revisions. The consensus is up 60% over the past year and 15% over the past month, with most 2024 revisions ranging from $150 to $180 or 30% to 50% above the stock current.

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Insiders are selling in the Procore rally

Procore Technologies (NYSE: PCOR) is a cloud-based and now AI-assisted platform that allows contractors, engineers and consumers to collaborate on projects. The company has a lofty valuation of 355 times its earnings and growth is slowing, but is expected to remain above 20% this year and next. More importantly, profitability was recently achieved and is expected to improve significantly in 2024, with earnings per share more than doubling.

Nine Procore insiders have made sales in the last three months, 26 in total. The sellers include several directors, the CEO, the chief financial officer and legal advisors, leaving them with about 40% of the shares. Venture capital firm Iconiq Strategic Partners is also in the mix, but the sale was small and its holdings are still robust, representing nearly 25% of the company.

Analysts are buying Procore’s story. Fourteeners tracked by Insidertrades.com rate it a Moderate Buy and are pushing the consensus target higher. The consensus implies a 6% upside, but the six revisions so far in 2024 all have targets above that level. DA Davidson set the maximum target of $85 on February 5; implies an increase of 20%.

RXSight, Inc. Insiders taking profits off the table

RXSight, Inc. (NASDAQ: RXST) it’s an interesting play with healthcare, making devices for ophthalmic surgery, replacement lenses to be precise. Its replacement lenses are aimed at the cataract market and programmable after surgery using UV light. Insiders, including several directors, CEO, CCO, COO and CFO, have made twenty-three sales in the last 90 days and why not? The stock is up 300% since the IPO, offering a tidy sum for investors and insiders. The bullish trend will likely continue because the growth outlook is strong and likely cautious.

Analysts rate the stock as a solid buy. Insidertrades.com is rated #6 and they are raising their price targets in 2024. The bad news is that the consensus suggests the stock is 20% overvalued but lagging the market. The two targets set in 2024 are $41 and $54, suggesting the market is fairly priced at the current level. The next catalyst will be the fourth quarter earnings report, expected in early March. Analysts expect revenue of $27.73 million, a gain of 72%. That’s down from the previous quarter and year, but still solid.

Companies in this article:

Agency	Current price	Price change	Dividend yield	P/E ratio	Consensus assessment	Consensus price target
Procore Technologies (PCOR)	$72.54	+1.0%	N/A	-44.23	Moderate purchase	$75.33
RxSight (RXST)	$47.56	+0.1%	N/A	-27.49	Acquire	$37.63
Global Coinbase (COIN)	$122.07	+1.9%	N/A	-37.79	Jack	$103.68