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There was intensive insider selling in Green Mountain Coffee Roasters (NASDAQ:GMCR) in February 2012. The stock peaked at $71.15 on February 21, 2012 and plunged all the way to $17.11 on July 23, 2012 or 76.0% below the February, 2012 highs.

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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. Hibbett Sports (NASDAQ:HIBB) operates sporting goods stores in small to mid-sized markets primarily in the southeast, southwest, Mid-Atlantic, and Midwest regions of the United States.

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Insider selling by insider (last 30 days)

  • Cathy Pryor sold 10,803 shares on March 26 and currently holds 446 shares or less than 0.1% of the company. Cathy Pryor is currently Senior Vice President of Operations and has been with the company since 1988.
  • Michael Newsome sold 11,700 shares on March 22 and currently holds 25,229 shares or less than 0.1% of the company. Michael Newsome has been the company's Executive Chairman since March 2010.
  • Rebecca Jones sold 6,998 shares on March 22 and currently holds 441 shares or less than 0.1% of the company. Rebecca Jones was hired as Vice President of Merchandising effective August 2009 and is currently a Senior Vice President of the company.
  • Terrance Finley sold 9,641 shares on March 19 and currently holds 5,605 options or less than 0.1% of the company. Terrance Finley has been a Director since March 2008.
  • Albert Johnson sold 2,000 shares on March 20 and currently holds 2,462 shares or less than 0.1% of the company. Albert Johnson has been a Director since March 2008.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
March 201341,1420
February 201300
January 201300

The month of March has seen all of the insider selling this year.

Financials

The company reported the fiscal year 2013, which ended February 2, 2013, financial results on March 15 with the following highlights:

Revenue$818.7 million
Net income$72.6 million
Cash$76.9 million

Outlook

For fiscal 2014, the company expects to report diluted earnings per share in the range of $2.85 to $3.05 and an increase in comparable store sales in the low to mid-single digit range. For Fiscal 2014, the company expects to open 65 to 70 new stores, expand approximately 18 high performing stores and close 15 to 20 stores.

Competition

Hibbett Sports' competitors include Foot Locker (NYSE:FL) and Wal-Mart Stores (NYSE:WMT). Here is a table comparing these companies.

CompanyHIBBFLWMTIndustry Average (Sporting Goods Stores)
Market Cap:1.46B5.27B248.96B5.82B
Employees:N/AN/A2,000,00011.10K
Qtrly Rev Growth (yoy):0.140.140.040.25
Revenue:818.70M6.18B469.16B5.84B
Gross Margin:0.370.330.250.31
EBITDA:128.80M739.33M36.30B648.77M
Operating Margin:0.140.100.060.12
Net Income:72.58M397.00M17.00BN/A
EPS:2.722.585.022.31
P/E:20.7213.3614.8520.48
PEG (5 yr expected):1.101.141.511.07
P/S:1.780.850.531.00

Hibbett Sports is trading above the industry average P/S ratio, 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 20.72 and a forward P/E ratio of 16.37. The company has a book value of $9.25 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.

2. Home Properties (NYSE:HME) is an independent real estate investment trust. The firm invests in the real estate markets of the United States.

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Insider selling by insider (last 30 days)

  • Donald Hague sold 9,504 shares on March 27 and currently holds 17,479 shares or less than 0.1% of the company. Donald Hague has served as Senior Vice President, Development since January 2008.
  • Edward Pettinella sold 9,647 shares on March 22 and currently holds 282,031 shares or 0.5% of the company. Edward Pettinella has served as President and Chief Executive Officer of the company since 2004.
  • Alan Gosule sold 7,000 shares on March 22 and currently holds 29,765 shares or less than 0.1% of the company. Alan Gosule has been a Director of the company since 1996.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
March 201326,1510
February 20136,1871,600
January 201300

The month of March has seen the most insider selling.

Financials

The company reported the full year 2012 financial results on February 7 with the following highlights:

Revenue$644.3 million
Net income$135.3 million
Cash$21.1 million
Debt$2.8 billion

Outlook

For 2013, the company expects FFO between $4.28 and $4.44 per share, which will produce FFO per share growth of 3.8% to 7.6% when compared to 2012 results. The guidance range on FFO per share results for the first quarter of 2013 is $1.01 to $1.05.

Competition

Home Properties' competitors include Apartment Investment & Management Co. (NYSE:AIV), Associated Estates Realty Corporation (NYSE:AEC) and Avalonbay Communities (NYSE:AVB).

CompanyHMEAIVAECAVB
Market Cap:3.27B4.44B930.95M14.47B
Employees:1,2002,1504102,178
Qtrly Rev Growth (yoy):0.130.100.180.16
Revenue:644.35M996.93M174.87M1.06B
Gross Margin:0.640.580.600.64
EBITDA:375.95M561.41M87.80M647.61M
Operating Margin:0.320.210.190.37
Net Income:52.62M-128.12M2.64M263.80M
EPS:2.690.610.664.32
P/E:23.6549.8427.9429.26
PEG (5 yr expected):2.701.722.181.97
P/S:5.084.465.3213.67

Home Properties' valuation is in line with its competitors.

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 23.65 and a forward P/E ratio of 39.20. The company has a book value of $25.64 per share and the stock has a dividend yield of 4.41%. 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. Brown & Brown (NYSE:BRO) engages in the marketing and sale of insurance products and services in the United States.

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Insider selling by insider (last 30 days)

  • Laurel Grammig sold 17,298 shares on March 27 and currently holds 64,690 shares or less than 0.1% of the company. Laurel Grammig is Vice President, Secretary & Chief Compliance and Regulatory Officer.
  • Scott Penny sold 15,000 shares on March 27 and currently holds 45,315 shares or less than 0.1% of the company. Scott Penny is Regional President & Chief Acquisitions Officer.
  • Cory Walker sold 8,000 shares on March 18 and currently holds 112,871 shares or less than 0.1% of the company. Cory Walker is Senior Vice President, Treasurer and Chief Financial Officer.
  • Sam Boone sold 22,837 shares on March 18 and currently holds 91,134 shares or less than 0.1% of the company. Sam Boone is Regional Executive Vice President.
  • Roy Bridges sold 45,000 shares on March 14 and currently holds 106,181 shares or less than 0.1% of the company. Roy Bridges is Regional President.
  • Linda Downs sold 50,000 shares on March 8 and currently holds 410,895 shares or 0.3% of the company. Linda Downs is Chief Operating Officer.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
March 2013158,1350
February 201320,000339
January 201300

The month of March has seen the most insider selling.

Financials

The company reported the full year 2012 financial results on February 1 with the following highlights:

Revenue$1.2 billion
Net income$184.0 million
Cash$228.0 million
Debt$450.1 million

Competition

Brown & Brown's competitors include Aon plc (NYSE:AON), Arthur J Gallagher & Co. (NYSE:AJG) and Marsh & McLennan Companies (NYSE:MMC). Here is a table comparing these companies.

CompanyBROAONAJGMMCIndustry Average (Insurance Brokers)
Market Cap:4.57B19.17B5.18B20.73B5.13B
Employees:6,43864,72513,70754,00013.71K
Qtrly Rev Growth (yoy):0.240.040.160.030.06
Revenue:1.19B11.48B2.51B11.92B2.51B
Gross Margin:0.490.420.370.400.37
EBITDA:397.12M2.23B468.30M2.18B468.30M
Operating Margin:0.270.140.130.150.12
Net Income:178.73M994.00M195.00M1.18BN/A
EPS:1.262.991.592.131.59
P/E:25.2020.5925.8617.7925.61
PEG (5 yr expected):1.921.411.261.321.25
P/S:3.861.672.061.742.05

Brown & Brown 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. The stock is trading at a P/E ratio of 25.20 and a forward P/E ratio of 18.66. The company has a book value of $12.56 per share and the stock has a dividend yield of 1.13%. 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: 2 Financials And A Sporting Goods Company With Recent Intensive Insider Selling