We’ve now entered the quarterly earnings-related quiet period, where insider activity (typically buying) tends to drop sharply as companies institute policies that limit trading to prevent any sort of signaling. Throughout the week, we’ve seen fewer and fewer insider purchases make our list for the Daily Event Driven Monitor. The reduced insider buying is reflected in our Sell/Buy Ratio for this week. Insider buying declined to just around $23 million worth of stock (as compared to over $200 million the week prior) but what was also quite interesting to see is that insider selling increased sharply to over $4 billion.
The heightened insider selling stems from a couple of large sales by insiders at several tech companies, such as Oracle (ORCL) – which saw its CEO, Safra Catz, sell a whopping $1.56 billion of Oracle stock in a single week. It is worth noting, though, that these shares were sold as a result of exercising options immediately before the sales and were sold pursuant to a 10b5-1 trading plan adopted by Ms. Catz in September 2024. What this implies is that the sales likely aren’t a strong indicator of future trouble at Oracle.
It’s unlikely that Ms. Catz is panic selling because she expects the stock to crash. This doesn’t appear to be a “Pied Piper leaving town” moment, like when Elon Musk offloaded a massive amount of Tesla stock in November 2021. Instead, Ms. Catz’s sales more closely resemble the large sales of NVIDIA by Jensen Huang or the massive sales of Meta and Amazon stock by Mark Zuckerberg and Jeff Bezos respectively that we’ve written about in the past.
Oracle’s stock sometimes feels like the stock that never seems to go down. The company is up 46.93% in the last year and 283.93% in the last five years. Much of this can be attributed to Ms. Catz’s strong leadership of the company – she took over the role of CEO in 2014, after Larry Ellison stepped down from the role. She initially served as co-CEO alongside Mark Hurd, and then became the sole CEO in 2019 after Hurd’s resignation. Ms. Catz joined Oracle in April 1999, joining the Board of Directors by 2001 and becoming president by 2004. Before becoming CEO, she served as the company’s CFO – a fitting role considering her past experience as a Managing Director of Investment Banking at Donaldson, Lufkin & Jenrette.
The company’s stellar returns are also driven by equally stellar financial results, with revenue and net income growing consistently both quarter after quarter and year after year. The company announced fiscal 2025 (the year ended May 31, 2025) results earlier this month. Revenue for the year was up 8% YoY to $57.4 billion, with cloud services and license support revenues up 12% to $44.0 billion and cloud license and on-premise license revenues up 2% to $5.2 billion. The company expects total cloud growth rate (applications and infrastructure) to increase from 24% in fiscal 2025 to over 40% in fiscal 2026. The Cloud Infrastructure growth rate is expected to increase from 50% in fiscal 2025 to over 70% in fiscal 2026.