Stocks to Avoid Now?

If you're thinking of selling your stocks, you're not alone. According to insider tracker Form 4 Oracle, executives at these three firms cashed in shares last week:

The week's selling


Closing Price 2/20/09

Total Value Sold

52-Week Change

Owens & Minor (NYSE: OMI  )




Compass Minerals International (NYSE: CMP  )




NetSuite (NYSE: N  )




Sources:, Yahoo! Finance, Form 4 Oracle.

Insiders sell for many reasons, ranging from compensation to estate or tax planning to just plain getting out, but the reasons are rarely (if ever) given. Having said that, these are open market sales, made by executives who have 100% control over the timing of their trades. Not so at Equinix (Nasdaq: EQIX  ) and Omniture (Nasdaq: OMTR  ) , whose insiders have mostly been cashing in on a predetermined schedule known as a 10b5-1 trading plan.

Firms typically find their way here because those selling either exhibit good timing or are dumping significant portions of their stakes. G. Gilmer Minor III, chairman of the board of his namesake company, Owens & Minor, has shown anything but good timing in the past. He bought shares of SunTrust Banks (NYSE: STI  ) in July at $37.99 apiece. The stock is down more than 80% since.

So timing isn't the issue with Minor, volume is. He's dumped roughly 50% of his reported stake in Owens & Minor since March 4, 2008, when the company tallied ownership data for a proxy statement. More than a third of that selling was executed last Wednesday, at $36.49 a share.

Two weeks prior, Owens & Minor bumped the high end of its 2009 profit guidance to $2.70 per share, but trimmed the low end of its revenue growth guidance to 8%. Mixed signals? I'll say. Factor in Minor's selling and, on uncertainty alone, this strikes me as a stock to avoid.

Is this compass pointing south?
Compass Minerals, like Owens & Minor, gets mostly good ratings from our 125,000-strong Motley Fool CAPS community:


Compass Minerals

CAPS stars (5 max)


Total ratings


Percent Bulls


Percent Bears


Bullish pitches

58 out of 59

Data current as of Feb. 22, 2009.

They've good reason to like the stock. Following the worst year for dividends in five decades, management earlier this month announced a 6% dividend increase. Compass has boosted its payout in each of the last six years.

What's more, salt production is good business. I should know; I lived in Syracuse, New York for two years, and nowhere is salt more widely used to keep icy roads clear. So long as Old Man Winter keeps blowing cold, there'll be a need for Compass' salty services.

Compass also sells potash fertilizer like PotashCorp (NYSE: POT  ) , but competition isn't easily found in its core rock salt business.

"Great mid-cap company with a decent dividend. Deals in basic commodities; deicer salt and SOP. Wide business moat with limited competition," wrote CAPS investor jawilde earlier this month. "Has been able to raise prices as needed. Do not see any reason why this 'hidden gem' will not continue growing for quite some time."

That's a strong endorsement. So, why are insiders selling? General Manager Ronald Bryan and Rodney Underdown, combined, have sold close to $700,000 worth of stock over the past week.

Ownership isn't a concern; even after the sales, both executives maintain a healthy stake in the business via options. What's troubling is the timing. If Compass is as cheap and well-positioned as CAPS investors believe, isn't now the time to be buying? Color me confused.

There's your update. See you back here on Friday for more stocks you should avoid.

Get the inside scoop on stocks of all sizes:

Fool contributor Tim Beyers also writes for Motley Fool Rule Breakers. Omniture is a Stock Advisor selection. Try either of these market-beating services free for 30 days.

Tim didn't own stock in any of the companies mentioned in this article at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool.

The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is the undisputed heavyweight champ among disclosure policies.

Read/Post Comments (1) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 23, 2009, at 4:20 PM, Seano67 wrote:

    Stocks to avoid now? How about all of them? Nothing's safe or reliable anymore. There is not a dividend that's safe, not a sector nor industry, not a geographic region- everything's getting slaughtered out there.

    I'm about ready to swallow my losses and just pull the hell out already, but something's stopping me. I don't know, maybe I just need to go ahead and lose it all.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 837152, ~/Articles/ArticleHandler.aspx, 10/28/2016 3:50:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,181.36 11.68 0.06%
S&P 500 2,127.89 -5.15 -0.24%
NASD 5,200.23 -15.75 -0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 3:33 PM
CMP $71.90 Down -0.50 -0.69%
Compass Minerals CAPS Rating: ****
EQIX $354.87 Up +3.31 +0.94%
Equinix CAPS Rating: **
N $95.10 Up +0.73 +0.77%
NetSuite CAPS Rating: **
OMI $32.34 Up +0.05 +0.15%
Owens and Minor CAPS Rating: *****
OMTR.DL $0.00 Down +0.00 +0.00%
Omniture CAPS Rating: ****
POT $16.48 Up +0.02 +0.09%
PotashCorp CAPS Rating: ****
STI $45.32 Down -0.34 -0.74%
SunTrust Banks CAPS Rating: ****