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Coburn Gordon: insider trades

Officer at Cognizant. No open-market purchases and 12 sales not made under a pre-set plan, reported from March 11, 2010 to March 19, 2013.

What happened after Coburn Gordon’s sales?

After their sales, the shares moved 0.0% against the index over 12 months on average (a negative figure means selling was the right call); 67% trailed it.

With 296 insiders tested, some will look skilled or unskilled by chance alone: when we replaced each insider’s stocks with random companies bought on the same days, about 5.7 cleared the bar ahead and 23.3 behind. One record on its own proves little.

Trade by trade

MeasuredTrades countedAverage vs S&P 500MedianWent the right wayYearst-statisticp-valueEvidence
Purchases, 3 months after the report 0 — — — — — — Not enough years
Purchases, 6 months after the report 0 — — — — — — Not enough years
Purchases, 12 months after the report 0 — — — — — — Not enough years
Purchases, 12 months after the trade 0 — — — — — — Not enough years
Sales, 3 months after the report 12 −6.2% −2.5% 75% 3 — — Not enough years
Sales, 12 months after the report 12 0.0% −5.7% 67% 3 — — Not enough years
Sales, 12 months after the trade 12 0.0% −6.3% 67% 3 — — Not enough years

“Average vs S&P 500” is the stock’s return including dividends minus the index’s over the same dates, from the close on the first trading day after the report, or from the close on the trade date. Only windows that have finished are counted. For sales, a negative figure means the stock lagged after it was sold, so selling was the right call (green). “Went the right way” is the share of purchases that beat the index, or of sales that trailed it. The t-statistic uses one average per year of reports, because one person’s trades bunch into the same stock and weeks, and needs trades in at least four different years; the p-value comes from the t distribution with that number of years (with four years, a t of 2 has p = 0.14). “Some evidence” means p under 5%, “strong evidence” p under 1% over at least six years.

Companies traded

CompanyTitle on the latest filingPurchasesSalesFirst reportLatest report
Cognizant CTSH President012March 11, 2010March 19, 2013

Trades and what followed

Moves are against the S&P 500; green means the trade went the insider’s way.

ReportedTradedCompanyTradeValue3 months after report12 months after report12 months after trade
March 19, 2013March 15, 2013 CTSH Sale $2,266,075 −23.1%+5.4%+8.8%
March 7, 2013March 5, 2013 CTSH Sale $380,058 −23.8%+7.9%+8.2%
February 21, 2013February 19, 2013 CTSH Sale $320,396 −25.5%+12.3%+5.8%
February 22, 2011February 17, 2011 CTSH Sale $1,778,714 −2.8%−10.9%−11.3%
December 15, 2010December 13, 2010 CTSH Sale $708,100 +2.0%−6.7%−5.7%
December 13, 2010December 9, 2010 CTSH Sale $420,402 +2.9%−4.6%−6.7%
September 15, 2010September 13, 2010 CTSH Sale $725,056 −1.4%−7.1%−9.3%
September 10, 2010September 8, 2010 CTSH Sale $1,904,100 −1.0%−9.3%−9.6%
September 7, 2010September 2, 2010 CTSH Sale $2,465,900 −2.5%−9.6%−9.1%
August 20, 2010August 18, 2010 CTSH Sale $604,100 −2.4%−11.7%−7.3%
August 12, 2010August 10, 2010 CTSH Sale $574,442 −3.5%−0.4%−0.6%
March 11, 2010March 9, 2010 CTSH Sale $265,090 +6.6%+34.8%+36.6%

Open-market purchases and sales of at least $10,000 in companies we cover, from SEC Form 4 filings; sales made under a pre-set Rule 10b5-1 plan are not shown. “Not yet” means the window has not finished or the share price was under $5 at entry. These are the shares’ moves after each trade: they say nothing about why Coburn Gordon traded and do not suggest the use of non-public information. How every insider compares · the insider trading backtest.