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There was intensive insider selling in Zillow (Z) in September 2012. The stock peaked at $46.86 on September 20, 2012 and tanked on November 6 after the third-quarter financial results.

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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. Zillow engages in the operation of a real estate and home-related information marketplace on mobile and the Web in the United States.

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Insider selling by insider (last 30 days)

  • Greg Schwartz sold 7,058 shares on February 22-25 pursuant to a Rule 10b5-1 trading plan. Greg Schwartz currently holds 35,152 options or 0.1% of the company. Greg Schwartz is Chief Revenue Officer.
  • Amy Bohutinsky sold 3,500 shares on February 19 pursuant to a Rule 10b5-1 trading plan. Amy Bohutinsky currently holds 15,632 options or less than 0.1% of the company. Amy Bohutinsky is Chief Marketing Officer.
  • Spencer Rascoff sold 43,210 shares on February 4-21 and currently holds 96,771 shares or 0.3% of the company. Spencer Rascoff is the Chief Executive Officer and a Director of Zillow.
  • Gordon Stephenson sold 3,500 shares on February 19 and currently holds 15,500 shares or less than 0.1% of the company. Gordon Stephenson serves as a director of the company.
  • Lloyd Frink sold 243,900 shares on February 19-20 and currently controls 3,817,427 shares or 11.2% of the company. Lloyd Frink is co-founder and Vice Chairman of Zillow.
  • Richard Barton sold 85,000 shares on February 19-20 and currently controls 4,663,759 shares or 13.7% of the company. Richard Barton is co-founder and Executive Chairman of Zillow.
  • David Beitel sold 17,500 shares on February 12-13 pursuant to a Rule 10b5-1 trading plan. David Beitel currently holds 215,234 shares or 0.6% of the company. David Beitel is Chief Technology Officer.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
February 2013403,6680
January 201327,0990
December 201219,4990
November 201281,8490
October 201298,4990
September 201216,5580

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

Financials

The company reported the full year 2012 financial results on February 13 with the following highlights:

Revenue$116.9 million
Net income$5.9 million
Cash$194.1 million

Outlook

Zillow's revenue for the first quarter of 2013 is expected to be in the range of $36 to $37 million. This outlook represents 60% year-over-year growth at the midpoint of the range. For the first quarter outlook on EBITDA, Zillow expects a range of $3 million to $3.5 million. And at the midpoint of our range, this represents approximately a 9% margin.

Zillow expects full-year revenue of between $165 million and $170 million, and EBITDA margin percentage to be flat to slightly down year over year.

Competition

Zillow's competitors include Market Leader (LEDR) and Zaio (OTC:ZAOFF). Here is a table comparing these companies.

CompanyZLEDRZAOFFIndustry Average (Business Services)
Market Cap:1.55B205.35M6.54M256.27M
Employees:560N/AN/A610.00
Qtrly Rev Growth (yoy):0.730.27N/A0.15
Revenue:116.85M44.99M3.97M192.45M
Gross Margin:0.881.000.470.37
EBITDA:12.37M-1.54M82.02K18.82M
Operating Margin:0.06-0.170.010.06
Net Income:5.94M-7.78M-1.24MN/A
EPS:0.18-0.30-0.040.10
P/E:253.28N/AN/A22.12
PEG (5 yr expected):4.2812.40N/A1.13
P/S:13.244.561.651.66

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

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 six analyst buy ratings, four neutral ratings and zero sell ratings, with an average target price of $36.38. The stock is trading at a P/E ratio of 253.28 and a forward P/E ratio of 61.61. The company has a book value of $8.27 per share. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The four main reasons for the proposed short entry are bearish analyst target prices, high P/S ratio, high P/E ratio and the intensive insider selling activity.

2. TriMas Corporation (TRS) designs, manufactures, and distributes various products for commercial, industrial, and consumer markets worldwide.

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Insider selling by insider (last 30 days)

  • Lynn Brooks sold 38,000 shares on February 27 and currently holds 37,629 shares or less than 0.1% of the company. Lynn Brooks is President, Rieke Packaging Systems.
  • Paul Swart sold 2,000 shares on February 27 and currently holds 9,795 shares or less than 0.1% of the company. Paul Swart is Controller and Chief Accounting Officer.
  • Samuel Valenti sold 7,000 shares on February 27 and currently holds 6,958 shares or less than 0.1% of the company. Samuel Valenti serves as a director of the company.
  • Heartland Industrial Associates sold 1,500,000 shares on February 27 and currently controls 2,404,972 shares or 6.2% of the company.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
February 20131,547,0000
January 201300
December 201200
November 201224,0060
October 201200
September 201200
August 20121,500,0000
July 201200
June 201200
May 201221,0000
April 201200
March 2012203,1620
February 201239,2746,000

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

Financials

The company reported the full year 2012 financial results on February 26 with the following highlights:

Revenue$1.3 billion
Net income$33.9 million
Cash$20.6 million
Debt$422.5 million

Outlook

The company is estimating that 2013 sales will increase 6% to 8% compared to 2012. The company expects full-year 2013 diluted earnings per share from continuing operations to be between $2.15 and $2.25 per share, excluding any future events that may be considered Special Items. In addition, the company expects 2013 free cash flow, defined as cash flow from operating activities less capital expenditures, to be between $40 million and $50 million.

Competition

TriMas' competitors include EnPro Industries (NPO) and Greif (GEF). Here is a table comparing these companies.

CompanyTRSNPOGEFIndustry Average (Industrial Equipment & Components)
Market Cap:1.14B972.69M2.43B1.12B
Employees:5,500N/A13,5601.90K
Qtrly Rev Growth (yoy):N/A0.030.020.12
Revenue:1.27B1.18B4.29B1.45B
Gross Margin:0.270.340.180.36
EBITDA:173.56M163.00M474.40M182.50M
Operating Margin:0.100.090.070.09
Net Income:33.88M41.00M129.30MN/A
EPS:0.891.902.730.89
P/E:32.6024.7318.7424.72
PEG (5 yr expected):0.431.281.551.21
P/S:0.890.810.561.15

TriMas is trading above the industry average P/E 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 32.60 and a forward P/E ratio of 13.25. The company has a book value of $8.02 per share. 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.

3. United Therapeutics Corporation (UTHR), a biotechnology company, engages in the development and commercialization of therapeutic products for patients with chronic and life-threatening diseases in the United States and internationally.

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Insider selling by insider (last 30 days)

  • Christopher Patusky sold 6,000 shares on March 1 pursuant to a Rule 10b5-1 trading plan. Christopher Patusky currently holds 26,000 options or less than 0.1% of the company. Christopher Patusky serves as a director of the company.
  • Paul Mahon sold 12,000 shares on February 7-21 pursuant to a Rule 10b5-1 trading plan. Paul Mahon currently holds 33,600 shares or less than 0.1% of the company. Paul Mahon is Executive Vice President, General Counsel & Corporate Secretary.
  • Roger Jeffs sold 7,500 shares on February 15 pursuant to a Rule 10b5-1 trading plan. Roger Jeffs currently holds 18,863 shares or less than 0.1% of the company. Roger Jeffs is President and Chief Operating Officer.
  • Christopher Causey sold 1,500 shares on February 7 pursuant to a Rule 10b5-1 trading plan. Christopher Causey currently holds 508 shares or less than 0.1% of the company. Christopher Causey serves as a director of the company.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
March 20136,0000
February 201326,0000
January 201331,2490
December 201235,50019,167
November 20121,5000
October 201235,5500
September 201240,0010
August 201244,0000
July 2012148,2660

There have been 368,066 shares sold and 19,167 shares purchased since July 2012.

Financials

The company reported the full year 2012 financial results on February 26 with the following highlights:

Revenue$916.1 million
Net income$304.4 million
Cash$784.9 million
Debt$275.0 million

Outlook

The company expects revenues to be within a range of 5% above or below $1 billion for 2013.

Competition

United Therapeutics' competitors include Gilead Sciences (GILD) and Pfizer (PFE). Here is a table comparing these companies.

CompanyUTHRGILDPFEIndustry Average (Drug Manufacturers)
Market Cap:3.03B66.25B203.02B121.62M
Employees:N/AN/AN/A44.00
Qtrly Rev Growth (yoy):0.250.18-0.100.29
Revenue:914.08M9.70B58.99B56.98M
Gross Margin:0.870.750.810.77
EBITDA:453.60M4.39B26.18B-1.99M
Operating Margin:0.470.420.33-0.03
Net Income:304.44M2.59B9.49BN/A
EPS:5.711.641.94N/A
P/E:10.5726.5914.2416.56
PEG (5 yr expected):0.561.043.860.55
P/S:3.346.803.423.41

United Therapeutics' P/S ratio is in line with the industry average.

My analysis

There have been five insider sell transactions and there have not been any insider buy transactions during the last 30 days. There are four analyst buy ratings, eleven neutral ratings and two sell ratings, with an average target price of $50.91. The stock is trading at a P/E ratio of 10.57 and a forward P/E ratio of 9.00. The company has a book value of $21.61 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 target prices and the intensive insider selling activity.

Source: 3 Stocks With Recent Intensive Insider Selling