GTAT’s Recent Insider Selling
Each and every week I have been asked about insider selling and my answer has more or less been the same, “It doesn’t bother me”. I do believe GTAT’s insider selling is partly a function of share price appreciation after two years without share price appreciation. The other important item to consider is that a majority of the C-Suite compensation is tied up in stock grants that vest over time. However, if you want to truly understand the overall amount of C-suite’ skin in the game it is important to not only look at the current vested shares but also the shares that have not vested.
If you looked closely at GTAT’s proxy information specifically page numbers 50 and 51, you would have noticed a nice schedule that details the number of non-vested shares for the executive team.
C-Suite “Non Vested” Shares
Thomas Gutierrez (CEO)- holds over 1.1 million shares that have not vested
Richard Gaynor (CFO) – holds over 379,700 shares that have not vested
Dan Squiller (COO) – holds over 746,000 shares that have not vested
Conclusion and Support
The number of shares that have “not vested” for GTAT’s C-Suite truly staggering (see images below). There have been several reports recently of insider sales of 100,000 or 200,000 share blocks at a time but those sales should not outweigh the fact that GT’s C-Suite has millions of dollars of “skin” still invested in the game. The astounding amount of “non-vested” C-Suite shares should only give investors even more faith in management’s focus to increase shareholder value. Management’s focus on the medium to long-term will not only increase the value of the C-Suite “non-vested” shares but also increase the net worth of GTAT longs, who plan on holding the stock over the next few years.
Disclosure: I am long GTAT
Reminder: My PTT Research Forensics Newsletter that is scheduled to be published on Thursday June 5th at 3pm EST.
My Forensics Newsletter pricing is now available and a special 20% launch discount (for the first 48 hours) will be available when my Forensics Newsletter subscription goes on sale on Monday June 2nd at 12pm EST.
If you were wondering what my next pick will be. Here is my sneak peek summary:
My next pick is a company that is built on top of a strong foundation of intellectual property. My analysis of the company’s data and public comments indicate that a “major ramp” in future sales is just getting underway. The company’s C-suite is in the process of scaling up the business and preparing to manage a much larger and more complex company. The company has quietly created an integrated eco-system comprised of software and hardware that continues to extend its competitive edge over its largest competitors. The industry that the company primarily supports is in the early stages of what is expected to be an explosive and long-term growth cycle.