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There was intensive insider selling in Skyworks Solutions (NASDAQ:SWKS) from August 3, 2012 to September 14, 2012. The stock peaked at $31.44 on September 7, 2012. On September 20, 2012, the company updated its revenue and earnings outlook and the stock tanked to $23. The stock traded as low as $19.21 on November 5, 2012.

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Here is a table of Skyworks' insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 201300
December 201215,0000
November 201200
October 201200
September 2012136,6190
August 2012472,6140
July 2012463,7010
June 2012289,3270
May 2012199,5000
April 201200
March 201257,0000
February 2012132,4390

By looking at this table, we can see that the insider selling in Skyworks peaked just before the stock tanked. With this episode in mind, I decided to screen for stocks which have seen recent intensive insider selling.

Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10 percent.

In this article, I will feature five stocks that met these three criteria of intensive insider selling in the last 30 days.

1. Varian Medical Systems (NYSE:VAR) designs, manufactures, sells, and services medical devices and software for treating cancer with radiotherapy, radiosurgery, proton therapy, and brachytherapy worldwide.

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Insider selling by insider (last 30 days)

  • Ruediger Naumann-Etienne sold 5,000 shares on January 28 and currently holds 0 shares of the company. Ruediger Naumann-Etienne has been a director of the company since 2003.
  • John Kuo sold 1,716 shares on January 11-14 pursuant to a Rule 10b5-1 trading plan. John Kuo currently holds 9,368 shares or less than 0.1% of the company. John Kuo was named Corporate Vice President, General Counsel and Secretary for Varian Medical Systems in 2005.
  • Kolleen Kennedy sold 2,803 shares on January 7-14 pursuant to a Rule 10b5-1 trading plan. Kolleen Kennedy currently holds 10,719 shares or less than 0.1% of the company. Kolleen Kennedy was named corporate senior vice president as well as president of Varian's Oncology Systems business in October, 2011.
  • Robert Kluge sold 96,167 shares on January 3-7 pursuant to a Rule 10b5-1 trading plan. Robert Kluge currently holds 28,211 shares or less than 0.1% of the company. Robert Kluge is corporate senior vice president and president of the X-Ray Products business.
  • Elisha Finney sold 10,000 shares on January 2-7 pursuant to a Rule 10b5-1 trading plan. Elisha Finney currently holds 6,899 shares or less than 0.1% of the company. Elisha Finney was named vice president, finance and CFO of Varian Medical Systems in April, 1999.

Insider selling by calendar month

Here is a table of Varian Medical Systems' insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2013115,6860
December 2012187,9350
November 201287,4750
October 2012191,4770
September 20125,9000
August 201247,5850
July 20124,0000
June 20124,0000

From this table we can see that the insider selling in January 2013 has been the third highest since June 2012.

Financials

The company reported the first quarter fiscal year 2013, which ended December 28, 2012, financial results on January 23 with the following highlights:

Revenue$678 million
Net income$95 million
Cash$755 million
Debt$206 million

Outlook

Dow R. Wilson, CEO of Varian Medical Systems, commented on January 23:

"We are pleased with our first quarter results in revenues and earnings, which should keep the company on track for hitting its fiscal 2013 growth targets. We remain confident in the fundamental long-term strategy for serving our markets. For the second quarter of fiscal year 2013, total company revenues could increase by about 5 to 6 percent over the prior year quarter. With the balance of restructuring charges from the enhanced retirement program, net earnings per diluted share for the second quarter should be in the range of $0.98 to $1.03. For the fiscal year, we continue to believe that total company revenues could increase by about 8 to 9 percent over the prior fiscal year. Net earnings per diluted share for the fiscal year could be in the range of $4.08 to $4.16."

Competition

Varian Medical Systems' competitors include Accuray (NASDAQ:ARAY). Here is a table comparing these two companies.

CompanyVARARAYIndustry
Market Cap:7.84B368.59M96.17M
Employees:6,2001,100315.00
Qtrly Rev Growth (yoy):0.09-0.180.16
Revenue:2.86B391.52M47.86M
Gross Margin:0.430.350.57
EBITDA:667.92M-29.77M834.00K
Operating Margin:0.21-0.160.02
Net Income:432.15M-69.66MN/A
EPS:3.83-0.98N/A
P/E :18.70N/A21.50
PEG (5 yr expected):1.510.031.28
P/S:2.740.942.76

Varian Medical Systems' P/S ratio is in-line with the industry average.

My analysis

There have been eight insider sell transactions and there have not been any insider buy transactions during the last 30 days. There are 12 analyst buy ratings, five neutral ratings and one sell ratings, with a average target price of $70.67. The stock is trading at a P/E ratio of 18.70 and a forward P/E ratio of 15.52. The company has a book value of $14.44 per share. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are bearish analyst price targets and the intensive insider selling activity.

2. eBay (NASDAQ:EBAY) provides online platforms, services, and tools to help individuals and merchants in online and mobile commerce and payments in the United States and internationally.

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Insider selling by insider (last 30 days)

  • Fred Anderson sold 40,120 shares on January 25 and currently holds 6,000 shares or less than 0.1% of the company. Fred Anderson has served as a director of eBay since July 2003.
  • Robert Swan sold 254,850 shares on January 22-24 pursuant to a Rule 10b5-1 trading plan. Robert Swan currently holds 308,803 shares or less than 0.1% of the company. Robert Swan is Senior Vice President, Finance and Chief Financial Officer of eBay.
  • Mark Carges sold 200,000 shares on January 23 and currently holds 69,228 shares or less than 0.1% of the company. Mark Carges is Chief Technology Officer and Senior Vice President, Global Products, Marketplaces.
  • Alan Marks sold 31,237 shares on January 22 and currently holds 47,626 shares or less than 0.1% of the company. Alan Marks is Senior Vice President, Corporate Communications of eBay.
  • John Donahoe sold 250,000 shares on January 22 pursuant to a Rule 10b5-1 trading plan. John Donahoe currently holds 360,132 shares or less than 0.1% of the company. John Donahoe is President and Chief Executive Officer of eBay.

Insider selling by calendar month

Here is a table of eBay's insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2013776,2070
December 20121,2500
November 2012241,9670
October 201294,6860
September 201213,7500
August 2012170,3560
July 20121,396,8020
June 20121,2500
May 201261,2500
April 2012150,6320
March 20127,2500

From this table we can see that the insider selling in January 2013 has been the highest since July 2012.

Financials

The company reported the full year 2012 financial results on January 16 with the following highlights:

Revenue$14.1 billion
Net income$2.6 billion
Cash$11.5 billion
Debt$4.5 billion

Outlook

  • First quarter 2013 - eBay expects net revenues in the range of $3,650-$3,750 million with GAAP earnings per diluted share in the range of $0.48-$0.50 and non-GAAP earnings per diluted share in the range of $0.60-$0.62.
  • Full year 2013 - eBay expects net revenues in the range of $16,000-$16,500 million with GAAP earnings per diluted share in the range of $2.23-$2.29 and non-GAAP earnings per diluted share in the range of $2.70-$2.75.

Competition

eBay's competitors include Amazon.com (NASDAQ:AMZN), Google (NASDAQ:GOOG) and Overstock.com (NASDAQ:OSTK). Here is a table comparing these companies.

CompanyEBAYAMZNGOOGOSTKIndustry
Market Cap:71.42B123.94B248.28B386.88M350.29M
Employees:N/A56,200N/A1,3001.30K
Qtrly Rev Growth (yoy):0.180.270.360.070.15
Revenue:14.07B57.26B50.18B1.07B475.30M
Gross Margin:0.700.240.590.180.36
EBITDA:4.09B2.09B15.72B17.95M17.95M
Operating Margin:0.210.010.250.00-0.00
Net Income:2.61B40.00M10.79B2.47MN/A
EPS:1.990.0832.310.10-0.30
P/E:27.733,257.3823.33161.7627.88
PEG (5 yr expected):1.38-244.001.161.450.41
P/S:5.082.164.950.361.14

eBay is trading above the industry average P/S ratio, which could explain some of the insider selling.

My analysis

There have been six insider sell transactions and there have not been any insider buy transactions during the last 30 days. There are 25 analyst buy ratings, 13 neutral ratings and 0 sell ratings, with a average target price of $51.85. The stock is trading at a P/E ratio of 27.73 and a forward P/E ratio of 17.25. The company has a book value of $15.38 per share. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are high P/S ratio, bearish analyst price targets and the intensive insider selling activity.

3. Broadcom Corporation (NASDAQ:BRCM) designs and develops semiconductor solutions for wired and wireless communications.

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Insider selling by insider (last 30 days)

  • Scott McGregor sold 60,000 shares on January 8-22 pursuant to a Rule 10b5-1 sales plan. Scott McGregor currently holds 1,084,913 shares or 0.2% of the company. Scott McGregor serves as President and Chief Executive Officer of Broadcom.
  • Terri Timberman sold 11,000 shares on January 2-16 pursuant to a Rule 10b5-1 sales plan. Terri Timberman currently holds 134,337 shares or less than 0.1% of the company. Terri Timberman serves as Executive Vice President, Global Human Resources for Broadcom.
  • Arthur Chong sold 88,021 shares on December 30, 2012 - January 16, 2013 pursuant to a Rule 10b5-1 sales plan. Arthur Chong currently holds 222,927 shares or less than 0.1% of the company. Arthur Chong serves as Executive Vice President, General Counsel and Secretary of Broadcom.
  • Neil Kim sold 43,529 shares on January 10-16 pursuant to a Rule 10b5-1 sales plan. Neil Kim currently holds 136,502 shares or less than 0.1% of the company. Neil Kim serves as Executive Vice President, Operations and Central Engineering of Broadcom.
  • John Major sold 1,000 shares on January 16 pursuant to a Rule 10b5-1 sales plan. John Major currently holds 26,165 shares or less than 0.1% of the company. John Major has been a director of Broadcom since January 2003.
  • Henry Samueli sold 50,000 shares on January 2-16 pursuant to a Rule 10b5-1 sales plan. Henry Samueli currently holds 196,669 shares or less than 0.1% of the company. Dr. Henry Samueli is a Co-Founder of Broadcom and serves as Chairman of the Board and Chief Technical Officer.

Insider selling by calendar month

Here is a table of Broadcom's insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2013250,5340
December 2012410,0000
November 2012588,0000
October 2012230,5000
September 2012271,4000
August 2012140,0530

Broadcom has seen steady insider selling during the past six months.

Financials

The company reported the full year 2012 financial results on January 29 with the following highlights:

Revenue$8.0 billion
Net income$719 million
Cash$2.4 billion
Debt$1.7 billion

Competition

Broadcom's competitors include Infineon Technologies (OTCQX:IFNNY), Qualcomm (NASDAQ:QCOM) and Texas Instruments (NASDAQ:TXN). Here is a table comparing these companies.

CompanyBRCMIFNNYQCOMTXNIndustry
Market Cap:19.29B9.65B109.74B36.67B440.45M
Employees:9,59026,65826,600N/A929.00
Qtrly Rev Growth (yoy):0.09-0.050.18-0.130.13
Revenue:7.55B5.05B19.12B12.82B192.73M
Gross Margin:0.490.370.630.500.45
EBITDA:1.16B1.20B6.66B3.99B13.92M
Operating Margin:0.100.130.300.210.04
Net Income:722.00M559.31M5.33B1.76BN/A
EPS:1.280.503.511.51N/A
P/E:26.7917.7518.3721.9120.81
PEG (5 yr expected):0.961.281.022.111.08
P/S:2.551.915.742.861.59

Broadcom is trading above the industry average P/S ratio, which could explain some of the insider selling.

My analysis

There have been 12 insider sell transactions and there have not been any insider buy transactions during the last 30 days. The stock is trading at a P/E ratio of 26.79 and a forward P/E ratio of 11.52. The company has a book value of $13.20 per share and the stock has a 1.17% dividend yield. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are high P/S ratio, high P/E ratio and the intensive insider selling activity.

4. BioMarin Pharmaceutical (NASDAQ:BMRN) develops and commercializes biopharmaceuticals for serious diseases and medical conditions in the United States, Europe, Latin America, and rest of the world.

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Insider selling by insider (last 30 days)

  • Jean Bienaime sold 44,000 shares on December 24, 2012 - January 22, 2013 pursuant to a Rule 10b5-1 trading plan executed on December 4, 2012. Jean Bienaime currently holds 153,691 shares or 0.1% of the company. Jean Bienaime joined BioMarin in May 2005 as Chief Executive Officer and member of the Board of Directors.
  • Jeffrey Ajer sold 3,000 shares on January 22 pursuant to a Rule 10b5-1 trading plan executed on December 11, 2012. Jeffrey Ajer currently holds 10,570 shares or less than 0.1% of the company. Jeffrey Ajer joined BioMarin in 2005 and is currently the Senior Vice President and Chief Commercial Officer.
  • Mark Wood sold 46,749 shares on January 22 pursuant to a Rule 10b5-1 trading plan executed on August 13, 2012. Mark Wood currently holds 25,646 shares or less than 0.1% of the company. Mark Wood joined BioMarin in May 2004 and currently serves as the Senior Vice President of Human Resources and Corporate Affairs.
  • Robert Baffi sold 39,575 shares on January 3-22 pursuant to a Rule 10b5-1 trading plan executed on August 6, 2012. Robert Baffi currently holds 100,413 shares or less than 0.1% of the company. Robert Baffi joined BioMarin in May 2000 and currently serves as Executive Vice President of Technical Operations.
  • Richard Meier sold 10,000 shares on January 2 pursuant to a Rule 10b5-1 trading plan executed on December 11, 2012. Richard Meier currently holds 18,650 shares or less than 0.1% of the company. Richard Meier joined BioMarin's Board in December 2006 and serves as the Chairman of the Audit Committee.

Insider selling by calendar month

Here is a table of BioMarin's insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2013121,3240
December 201262,4150
November 2012409,9710
October 201239,6650
September 201216,6650
August 201247,6650
July 20125,1660

January 2013 has been the second highest insider selling month during the past seven months.

Financials

The company reported the third-quarter financial results on October 25 with the following highlights:

Revenue$128.1 million
GAAP Net Loss$5.4 million
Cash$533.2 million
Debt$348.3 million

Outlook

2012 Guidance

Revenue$475 million to $510 million
Net Cash Usage$20 million to $30 million
Cash Balance (End Of Year)$495 million to $505 million

Anticipated Upcoming Milestones

  • 1Q 2013: Market authorization application filing for GALNS for MPS IVA
  • 1Q 2013: Results for Phase 1/2 trial for BMN-701 for Pompe disease
  • 1H 2013: IND filing for BMN-190 for LINCL (Batten disease)
  • 2Q 2013: Initiation of Phase 3 trial for PEG-PAL for PKU
  • 2Q 2013: Results for PKU-016 Kuvan neurocognitive study
  • Mid 2013: Initiation of Phase 2 trial for BMN-111 for achondroplasia
  • 2H 2013: Potential initiation of Phase 3 trial for BMN-673 for solid tumors
  • 4Q 2013: Potential FDA approval of GALNS for MPS IVA

Pipeline

The company has a product pipeline, with multiple clinical and preclinical IND (Investigational New Drug) candidates in development.

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My analysis

The stock has met its $54 price target from the Point and Figure chart and is currently trading at $55. There have been nine insider sell transactions and there have not been any insider buy transactions during the last 30 days. There are 10 analyst buy ratings, four neutral ratings and 0 sell ratings, with a average target price of $52.93. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are bearish analyst target prices and the intensive insider selling activity.

5. Cardinal Health (NYSE:CAH), a healthcare services company, provides pharmaceutical and medical products and services in the United States and internationally.

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Insider selling by insider (last 30 days)

  • Craig Morford sold 47,274 shares on January 23 pursuant to a Rule 10b5-1 plan adopted on August 24, 2012. Craig Morford currently holds 70,088 shares or less than 0.1% of the company. Craig Morford is Chief Legal and Compliance Officer of the company.
  • Michael Kaufmann sold 58,362 shares on January 23 pursuant to a Rule 10b5-1 plan adopted on August 24, 2012. Michael Kaufmann currently holds 104,330 shares or less than 0.1% of the company. Michael Kaufmann is the chief executive officer of the Pharmaceutical segment of Cardinal Health.
  • Stephen Falk sold 78,947 shares on January 10-23 pursuant to a Rule 10b5-1 plan adopted on August 29, 2012. Stephen Falk currently holds 53,830 shares or less than 0.1% of the company. Stephen Falk is executive vice president, general counsel and corporate secretary where he oversees the Legal function and acts as the secretary to the board of directors.
  • Mark Blake sold 1,471 shares on January 10 pursuant to a Rule 10b5-1 plan adopted on August 25, 2012. Mark Blake currently holds 17,955 shares or less than 0.1% of the company. Mark Blake is executive vice president of Strategy and Corporate Development.

Insider selling by calendar month

Here is a table of Cardinal Health's insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2013186,0540
December 20122,3300
November 20122,5640
October 201246,2260
September 201279,4100
August 201200
July 201200
June 201200
May 20128,1350
April 201200
March 201200
February 201271,5460

January 2013 has been the highest insider selling month during the past 12 months.

Financials

The company reported the fiscal 2013 first-quarter financial results on October 30 with the following highlights:

Revenue$25.9 billion
Net income$271 million
Cash$2.4 billion
Debt$2.9 billion

Competition

Cardinal Health's competitors include AmerisourceBergen (NYSE:ABC), McKesson (NYSE:MCK) and Owens & Minor (NYSE:OMI). Here is a table comparing these companies.

CompanyCAHABCMCKOMIIndustry
Market Cap:15.20B10.59B25.16B1.95B15.31B
Employees:32,50013,40037,7004,80013.40K
Qtrly Rev Growth (yoy):-0.03N/A-0.010.000.07
Revenue:106.65B79.49B123.19B8.78B106.65B
Gross Margin:0.040.030.050.100.24
EBITDA:2.23B1.43B2.96B251.37M2.23B
Operating Margin:0.020.020.020.020.02
Net Income:1.10B708.19M1.60B107.24MN/A
EPS:3.162.806.541.711.47
P/E:14.1416.0516.3117.9816.48
PEG (5 yr expected):1.431.231.182.011.24
P/S:0.140.140.200.220.20

Cardinal Health is growing below the industry average growth rate.

My analysis

There have been five insider sell transactions and there have not been any insider buy transactions during the last 30 days. The stock is trading at a P/E ratio of 14.14 and a forward P/E ratio of 11.93. The company has a book value of $18.31 per share and the stock has a 2.46% dividend yield. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are negative revenue growth and the intensive insider selling activity.

Source: 5 Stocks With Recent Intensive Insider Selling