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 this week:

The week's selling

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings.

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. That said, these are open-market sales, made by executives who have 100% control over the timing of their trades. Not so at CV Therapeutics (NASDAQ:CVTX) and Celgene (NASDAQ:CELG), whose insiders have been cashing in on a predetermined schedule known as a 10b5-1 trading plan.

I point this out because our top three sellers tend to exhibit good timing. Simpson Manufacturing CEO Thomas Fitzmyers is a good example. According to the analysts at Form4Oracle, he's made 11 profitable sales dating back to 2003, including his latest, in which he dumped close to 50% of his direct stake. That's not necessarily an indictment of this excellent business, a Motley Fool Hidden Gems pick which recently reported strong third-quarter revenue and earnings. But it is curious.

First you CME, then you don't
Equally curious is this press announcement from CME Group. Quoting from its congratulatory note to President-elect Barack Obama, a native of CME's home state of Illinois:

We congratulate Senator Obama and look forward to working with him to restore confidence in the U.S. financial markets system. We face tremendous challenges in the months ahead as we guide our economy toward recovery. For the United States to retain its position as a world leader, it is critical that our financial markets have the support and infrastructure needed to successfully compete in the global economy.

Makes sense. But is this (a) really a good use of shareholder capital and (b) anything other than grandstanding? Why not send a private note? We all know the president-elect will face economic challenges that may require additional stimuli. (Get more Foolish analysis of the impact of an Obama administration here.)

But trading volumes at the major exchanges should persist, right? Certainly they have for both NYSE Euronext (NYSE:NYX) and Nasdaq OMX (NASDAQ:NDAQ). Similarly, our 120,000-plus Motley Fool CAPS community predicts a bullish future for CME Group, which is the heavy when it comes to brokering futures and options contracts:

Data current as of Nov. 7, 2008.

"This company at around $300 (or 16.35 Bill Mkt Cap) per share trades at a compelling P/E of approximately 17 and Price to EBT of just 11 ... These price multiples are vastly lower than the historical average for CME," wrote CAPS investor Watch375k in September.

"Futures transactions will only continue to increase over the long-term. Nevermind the short-term gyrations of the trading volume that are announced on a monthly basis. Volumes will continue to move around over the short term as a result of a negative market, but volumes typically pick up when the market starts moving in a positive direction."

Certainly you'd think so. Which is exactly why I find it so confusing that four separate insiders have each sold off more than 10% each of their direct stakes in CME this week.

And that's your update. See you back here next week for more stocks you should avoid.

Get the inside scoop on stocks of all sizes with related Foolishness:

• Find out which executives were selling last time.
• This strategy is a winner.
• Get your dirt cheap value stocks here.
• Sometimes, the best companies make for the best returns.