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The Dow Jones Industrial Average hit the 14,000 mark last Friday. The index is currently only 150 points shy of its all time highs, which were recorded in October 2007.

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Many insiders are currently taking advantage of the record high prices of their stocks. For this article, I screened 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 three stocks that met these three criteria of intensive insider selling in the last 30 days.

1. Global Payments (NYSE:GPN) provides electronic payments transaction processing services for consumers, merchants, independent sales organizations, financial institutions, government agencies, and multi-national corporations in the United States, Canada, the United Kingdom, Spain, the Asia-Pacific, the Czech Republic, and the Russian Federation.

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Insider selling by insider (last 30 days)

  • Gerald Wilkins sold 2,867 shares on January 17-30 and currently holds 8,076 shares or less than 0.1% of the company. Gerald Wilkins serves as a director of the company.
  • Morgan Schuessler sold 4,518 shares on January 23-24 and currently holds 29,162 shares or less than 0.1% of the company. Morgan Schuessler serves as President, International.
  • William Jacobs sold 6,000 shares on January 17 and currently holds 39,940 shares or less than 0.1% of the company. William Jacobs serves as a director of the company.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
January 201313,3850
December 201200
November 201200
October 201200
September 201200
August 201200
July 201200
June 201200
May 201200
April 201200
March 201200
February 20122,0000

January 2013 has been the highest insider selling month since February 2012.

Financials

The company reported the second quarter fiscal year 2013, which ended November 30, 2012, financial results on January 8 with the following highlights:

Revenue$588.5 million
Net income$70.2 million
Cash$998.3 million
Debt$1.1 billion

Outlook

  • For the full-year of fiscal 2013, the company expects annual revenue of $2,360 million to $2,400 million, or 7% to 9% growth over fiscal 2012.
  • Annual expectations for fiscal 2013 diluted earnings per share on a cash basis are on a range of $3.61 to $3.68, or growth of 2% to 4% over fiscal 2012.

Competition

Here is a table comparing Global Payments to the Business Services industry.

CompanyGPNIndustry
Market Cap:3.88B278.46M
Employees:3,796898.00
Qtrly Rev Growth (yoy):0.110.15
Revenue:2.31B183.52M
Gross Margin:0.640.37
EBITDA:496.08M22.27M
Operating Margin:0.170.07
Net Income:179.86MN/A
EPS:2.280.13
P/E:21.6724.44
PEG (5 yr expected):1.111.15
P/S:1.681.85

Global Payments' valuation is in line with the industry average key metrics.

My analysis

There have been four 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 21.67 and a forward P/E ratio of 11.93. The company has a book value of $15.67 per share and the stock has a 0.16% dividend yield. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider selling activity.

2. The Procter & Gamble Company (NYSE:PG) serves approximately 4.6 billion people around the world with its brands.

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Insider selling by insider (last 30 days)

  • Valarie Sheppard sold 17,901 shares on February 1 and currently holds 6,423 shares or less than 0.1% of the company. Valarie Sheppard is Senior Vice President & Comptroller.
  • Filippo Passerini sold 22,460 shares on January 30 and currently holds 78,668 shares or less than 0.1% of the company. Filippo Passerini is Group President, Global Business Services, Chief Information Officer.
  • Ioannis Skoufalos sold 2,400 shares on January 28 and currently holds 11,455 shares or less than 0.1% of the company. Ioannis Skoufalos is Global Product Supply Officer.
  • Bruce Brown sold 49,824 shares on January 28 and currently holds 24,216 shares or less than 0.1% of the company. Bruce Brown is Chief Technology Officer.

Insider selling by calendar month

Here is a table of Procter & Gamble's insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 201317,9010
January 201374,6840
December 201200
November 201275,5980
October 201205,564
September 201200
August 2012495,7650
July 201200
June 201200

January 2013 has been the third highest insider selling month since June 2012.

Financials

The company reported the second quarter fiscal year 2013, which ended December 31, 2012, financial results on January 25 with the following highlights:

Revenue$22.2 billion
Net income$4.1 billion
Cash$6.6 billion
Debt$33.4 billion

Outlook

Fiscal year 2013

  • P&G's core earnings per share guidance for the year is in the range of $3.97 to $4.07.
  • P&G's organic sales growth guidance is in the range of three percent to four percent for the fiscal year.

January - March 2013 quarter

  • P&G's core earnings per share guidance for the January - March quarter is in the range of $0.91 to $0.97.
  • P&G's organic sales growth guidance is in the range of three percent to four percent for the January - March quarter.

Competition

Procter & Gamble's competitors include Johnson & Johnson (NYSE:JNJ) and Kimberly-Clark Corporation (NYSE:KMB). Here is a table comparing these companies.

CompanyPGJNJKMBIndustry
Market Cap:206.98B205.88B34.96B767.86M
Employees:126,000128,000N/A1.57K
Qtrly Rev Growth (yoy):0.020.080.030.09
Revenue:83.32B67.22B21.06B960.28M
Gross Margin:0.500.680.340.47
EBITDA:19.67B20.54B3.98B116.10M
Operating Margin:0.200.250.150.10
Net Income:11.17B10.85B1.75BN/A
EPS:4.413.864.421.16
P/E:17.2019.2520.3221.73
PEG (5 yr expected):2.292.131.601.71
P/S:2.463.051.651.82

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

My analysis

There have been four 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 17.20 and a forward P/E ratio of 17.36. The company has a book value of $23.51 per share and the stock has a 2.99% 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 relatively high P/S ratio and the intensive insider selling activity.

3. Google (NASDAQ:GOOG) is a global technology leader focused on improving the ways people connect with information.

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Insider selling by insider (last 30 days)

  • Kavitark Shriram sold 42,000 shares on January 3 - February 1 pursuant to Rule 10b5-1 trading plans adopted by the reporting person and the reporting person's spouse. Kavitark Shriram currently controls 167,709 shares or less than 0.1% of the company. Kavitark Shriram serves as a director of the company.
  • Nikesh Arora sold 1,300 shares on February 1 and currently holds 248 shares or less than 0.1% of the company. Nikesh Arora serves as Senior Vice President and Chief Business Officer of the company.
  • David Drummond sold 379 shares on January 2 - February 1 pursuant to a Rule 10b5-1 trading plan. David Drummond currently holds 3,151 shares or less than 0.1% of the company. David Drummond is Senior Vice President, Corporate Development.
  • Eric Schmidt sold 203,193 shares on January 25-29 pursuant to a Rule 10b5-1 trading plan. Eric Schmidt currently controls 7,526,514 shares or 2.3% of the company. Eric Schmidt serves as Executive Chairman of Board.
  • Lawrence Page sold 83,334 shares on January 14-17 pursuant to a Rule 10b5-1 trading plan. Lawrence Page currently holds 25,248,590 shares or 7.7% of the company. Lawrance Page is the CEO of the company.
  • John Doerr sold 5,777 shares on January 15 pursuant to a Rule 10b5-1 trading plan. John Doerr currently controls 1,232,564 shares or 0.4% of the company. John Doerr serves as a director of the company.
  • Patrick Pichette sold 184 shares on January 10 pursuant to a Rule 10b5-1 trading plan. Patrick Pichette currently holds 2,289 shares or less than 0.1% of the company. Patrick Pichette is Senior Vice President & Chief Financial Officer of the company.
  • Sergey Brin sold 83,334 shares on January 2 pursuant to a Rule 10b5-1 trading plan. Sergey Brin currently holds 24,687,838 shares or 7.5% of the company. Sergey Brin is the co-founder of the company.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
February 201321,4940
January 2013398,0070
December 2012362,3370

During the past six months there have been 2,224,810 shares sold and 0 shares purchased.

Financials

The company reported the full year 2012 financial results on January 22 with the following highlights:

Revenue$50.2 billion
Net income$10.7 billion
Cash$48.1 billion
Debt$5.5 billion

Competition

Google's competitors include Facebook (NASDAQ:FB) and Yahoo! (NASDAQ:YHOO). Here is a table comparing these companies.

CompanyGOOGFBYHOOIndustry
Market Cap:255.69B70.40B23.09B267.97M
Employees:N/AN/AN/A358.00
Qtrly Rev Growth (yoy):0.360.400.020.20
Revenue:50.18B5.09B4.99B131.60M
Gross Margin:0.590.730.680.59
EBITDA:15.72B1.19B1.46B14.27M
Operating Margin:0.250.110.160.04
Net Income:10.79B32.00M3.95BN/A
EPS:32.330.013.280.03
P/E:23.992,973.006.0226.82
PEG (5 yr expected):1.201.751.401.44
P/S:4.9714.424.602.53

Google is trading above the industry average P/S ratio.

My analysis

There have been 19 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 23.99 and a forward P/E ratio of 14.44. The company has a book value of $218.24 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 relatively high P/S ratio and the intensive insider selling activity.

Source: 3 Stocks With Recent Intensive Insider Selling