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There was intensive insider selling in Yamana Gold (NYSE:AUY) in late December, 2012 to early January, 2013 time period. The stock has been trending down since the intensive insider selling took place.

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With this episode in mind, 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%.

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

1. HCA Holdings (NYSE:HCA) provides healthcare services in the United States.

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Insider selling by insider (last 30 days)

  • Jonathan Perlin sold 48,695 shares on February 26, and currently controls 22,889 shares or less than 0.1% of the company. Jonathan Perlin is President, Clinical and Physician Services Group and Chief Medical Officer.
  • Martin Paslick sold 25,000 shares on February 27, and currently holds 19,484 shares or less than 0.1% of the company. Martin Paslick is Senior Vice President and Chief Information Officer.
  • David Anderson sold 51,548 shares on February 25-26, and currently holds 94,218 shares or less than 0.1% of the company. David Anderson is Senior Vice President, Finance and Treasurer.
  • Hercules Holding sold 49,691,767 shares on February 15, pursuant to a secondary offering. Hercules Holding currently controls 174,275,052 shares or 39.3% of HCA Holdings.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
February 201349,817,0100
January 201300
December 201200
November 2012148,1430
October 201200
September 201200
August 201200
July 201200
June 201200
May 201200
April 201200
March 201200
February 201200

The month of February 2013 has seen the most insider selling.

Financials

The company reported the full-year 2012 financial results on February 5, with the following highlights:

Revenue$33.0 billion
Net income$1.6 billion
Cash$705 million
Debt$28.9 billion

Outlook

The company's outlook for 2013 is as follows:

Revenue$33.50 billion to $34.50 billion
Adjusted EBITDA$6.25 billion to $6.50 billion
Adjusted EPS (diluted)$3.00 to $3.30

Competition

HCA Holdings' competitors include Health Management Associates (NYSE:HMA) and Tenet Healthcare (NYSE:THC). Here is a table comparing these companies.

CompanyHCAHMATHCIndustry Average (Hospitals)
Market Cap:16.91B2.80B4.15B52.29M
Employees:N/AN/AN/A7.17K
Qtrly Rev Growth (yoy):0.10-0.06-0.010.14
Revenue:33.01B5.88B9.12B54.98M
Gross Margin:0.370.400.830.33
EBITDA:6.50B974.19M1.20B5.62M
Operating Margin:0.150.100.080.09
Net Income:1.60B171.89M217.00MN/A
EPS:3.490.641.000.44
P/E:10.5117.1938.8723.33
PEG (5 yr expected):0.991.061.062.22
P/S:0.510.480.420.95

HCA Holdings is trading below the industry average P/S ratio.

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 10.51 and a forward P/E ratio of 9.65. The company has a book value of -$21.88 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 negative book value and the intensive insider selling activity.

2. First Cash Financial Services (NASDAQ:FCFS) operates retail-based pawn and consumer finance stores in the United States and Mexico.

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Insider selling by insider (last 30 days)

  • Stephen Coffman sold 84,500 shares on February 25-27, and currently holds 97,894 options or 0.3% of the company. Stephen Coffman is a former officer of the company.
  • Rick Wessel sold 45,000 shares on February 14-19, pursuant to a Rule 10b(5)-1 Trading Plan. Rick Wessel currently holds 542,700 shares or 1.9% of the company. Rick Wessel is Chairman of the Board & Chief Executive Officer.
  • James Motley sold 12,498 shares on February 11 and currently holds 750 shares or less than 0.1% of the company. James Motley is Vice President Finance.
  • Douglas Orr sold 60,000 shares on January 30 - February 7, pursuant to a Rule 10b(5)-1 Trading Plan. Douglas Orr currently holds 46,500 shares or 0.2% of the company. Douglas Orr is Executive Vice President & Chief Financial Officer.

Insider selling by calendar month

Here is a table of First Cash Financial Services' insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 2013193,0480
January 201328,9500
December 201230,0220
November 201227,3040
October 201200
September 201264,1790
August 201200
July 201200
June 201200
May 201200
April 201200
March 201200
February 201200

The month of February 2013 has seen the most insider selling.

Financials

The company reported the full-year 2012 financial results on January 23, with the following highlights:

Revenue$595.9 million
Net income$80.4 million
Cash$50.3 million
Debt$114.1 million

Outlook

  • The company's fiscal 2013 guidance for diluted earnings per share from continuing operations is in a range of $3.10 to $3.24, representing 14% to 19% earnings growth over 2012.
  • The company expects to open approximately 75 to 85 new stores in 2013, the majority of which will be in Mexico. All of the anticipated 2013 store openings will be large format pawn stores and it is anticipated that up to 30 of the new stores will be opened in the first quarter. As in 2012, the company will continue to look opportunistically for large format pawn acquisitions in strategic markets, which could further increase store additions for 2013.
  • Revenue growth in 2013 is expected to be generated exclusively from pawn operations, with no growth projected from payday lending. Approximately 92% to 93% of total 2013 revenues are expected to be derived from growing pawn operations.

Competition

First Cash Financial Services' competitors include Cash America International (NYSE:CSH) and EZCORP (NASDAQ:EZPW). Here is a table comparing these companies.

CompanyFCFSCSHEZPWIndustry Average (Credit Services)
Market Cap:1.56B1.46B1.13B1.56B
Employees:N/AN/A7,2003.50K
Qtrly Rev Growth (yoy):0.240.060.110.19
Revenue:595.95M1.80B1.02B595.95M
Gross Margin:0.570.560.630.76
EBITDA:136.83M291.76M220.10M136.83M
Operating Margin:0.210.120.190.22
Net Income:81.11M107.47M135.07MN/A
EPS:2.713.422.620.96
P/E:19.6414.757.9525.43
PEG (5 yr expected):0.820.670.561.17
P/S:2.610.811.103.29

The First Cash Financial Services gross margin is below the industry average, which could explain some of the insider selling.

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 19.64 and a forward P/E ratio of 14.13. The company has a book value of $12.11 per share. There are three analyst buy ratings, five neutral ratings and 0 sell ratings, with an average target price of $48.00. 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.

3. Independent Bank Corp. (NASDAQ:INDB) operates as the bank holding company for Rockland Trust Company that provides commercial banking services in Massachusetts.

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Insider selling by insider (last 30 days)

  • Barry Jensen sold 3,700 shares on February 27, and currently holds 11,312 shares or less than 0.1% of the company. Barry Jensen is Principal Accounting Officer.
  • Carl Ribeiro sold 2,500 shares on February 25, and currently holds 14,578 shares or less than 0.1% of the company. Carl Ribeiro serves as a director of the company.
  • John Morrissey sold 1,067 shares on February 22, and currently holds 2,286 shares or less than 0.1% of the company. John Morrissey serves as a director of the company.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
February 20137,2670
January 20135001,449
December 201200
November 2012200,6130
October 201200
September 201200
August 201223,5320
July 20128,7251,476
June 201200
May 20127,0000
April 201200
March 201200
February 20123,8000

The month of February 2013 has seen the second-highest insider selling activity since February 2012.

Financials

The company reported the full-year 2012 financial results on January 24, with the following highlights:

Net income$42.6 million
Book value$23.24 per share
Tangible book value$17.00 per share

Competition

Here is a table comparing Independent Bank against the industry average.

CompanyINDBIndustry Average (Regional - Northeast Banks)
Market Cap:692.20M130.75M
Employees:N/A205.00
Qtrly Rev Growth (yoy):0.110.09
Revenue:216.76M47.92M
Gross Margin:N/A0.00
EBITDA:N/AN/A
Operating Margin:0.320.30
Net Income:42.63MN/A
EPS:1.950.80
P/E:15.9314.11
PEG (5 yr expected):1.612.19
P/S:3.262.82

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

My analysis

There have been three 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 15.93 and a forward P/E ratio of 12.83. The company has a book value of $24.41 per share and the stock has a dividend yield of 2.65%. 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.

Source: 3 Stocks With Recent Intensive Insider Selling