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There was intensive insider selling in Allied Nevada Gold Corp. (ANV) in September 2012. The stock peaked at $41.02 on October 17, 2012 and has plunged all the way to $13.72 as of April 4, 2013 or 66.6% below the October, 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. Nike (NKE) engages in the design, development, marketing, and sale of footwear, apparel, equipment, and accessories for men, women, and children worldwide.

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Insider selling by insider (last 30 days)

  • Mark Parker sold 40,000 shares on April 2 and currently holds 662,916 shares or less than 0.1% of the company. Mark Parker has been President and Chief Executive Officer and a director since 2006.
  • Trevor Edwards sold 132,000 shares on March 27-28 and currently holds 217,924 shares or less than 0.1% of the company. Trevor Edwards is Vice President, Global Brand & Category Management.
  • Jeanne Jackson sold 10,159 shares on March 26 and currently holds 91,575 shares or less than 0.1% of the company. Jeanne Jackson is President, Direct to Consumer.
  • Donald Blair sold 33,000 shares on March 22 pursuant to an approved 10b5-1 trading plan. Donald Blair currently holds 159,766 shares or less than 0.1% of the company. Donald Blair is Vice President & Chief Financial Officer.
  • Bernard Pliska sold 40,000 shares on March 22 pursuant to an approved 10b5-1 trading plan. Bernard Pliska currently holds 60,000 options or less than 0.1% of the company. Bernard Pliska is Vice President, Controller.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
April 201340,0000
March 2013215,1590
February 201300
January 201380,7800

There have been 335,939 shares sold and zero shares purchased this year.

Financials

The company reported the fiscal 2013 third-quarter, which ended February 28, financial results on March 21 with the following highlights:

Revenue$6.2 billion
Net income$866 million
Cash$4.0 billion
Debt$321 million

Outlook

Nike expects full year reported revenue to grow at a mid-to-high single digit rate. For Q4, Nike expects reported revenue to grow at a mid-single digit rate.

Competition

Nike's competitors include Adidas (OTCQX:ADDYY). Here is a table comparing these two companies.

CompanyNKEADDYYIndustry Average (Textile - Apparel Footwear & Accessories)
Market Cap:53.04B21.74B5.09B
Employees:44,00040,16811.29K
Qtrly Rev Growth (yoy):0.060.040.00
Revenue:25.65B19.27B6.18B
Gross Margin:0.430.480.48
EBITDA:3.40B1.82B739.33M
Operating Margin:0.120.080.10
Net Income:2.28B681.01MN/A
EPS:2.571.634.69
P/E:23.1331.9251.72
PEG (5 yr expected):1.99-3.701.19
P/S:2.071.131.11

Nike 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 23.13 and a forward P/E ratio of 19.31. The company has a book value of $11.90 per share and the stock has a dividend yield of 1.43%. 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. Hertz Global Holdings (HTZ) engages in the car and equipment rental businesses worldwide.

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Insider selling by insider (last 30 days)

  • Robert Stuart sold 90,218 shares on April 2 pursuant to the Rule 10b5-1 Trading Plan. Robert Stuart currently holds 10,025 shares or less than 0.1% of the company. Robert Stuart has served as Senior Vice President, Global Sales of Hertz Holdings and Hertz since December 2007 and of Global Sales and Marketing since December 2011.
  • Joseph Eckroth sold 100,000 shares on March 28 - April 2 pursuant to the Rule 10b5-1 Trading Plan. Joseph Eckroth currently holds 69,187 shares or less than 0.1% of the company. Joseph Eckroth has served as Senior Vice President and Chief Information Officer of Hertz Holdings and Hertz since June 2007 and Global Customer Care since April 2009.
  • Bank of America (BAC) sold 23,983,386 shares on March 12 pursuant to a public offering. Bank of America currently controls 7,199,897 shares or 1.8% of Hertz.
  • Clayton Dubilier & Rice Fund VII sold 13,909,141 shares on March 12 pursuant to a public offering. Clayton Dubilier & Rice currently controls 16,649,571 shares or 4.2% of Hertz.
  • Jatindar Kapur sold 65,000 shares on March 11 and currently holds 69,794 shares or less than 0.1% of the company. Jatindar Kapur has served as Senior Vice President, Finance and Corporate Controller of Hertz and Hertz Holdings since April 2008.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
April 2013160,2180
March 201337,987,5270
February 2013152,4860
January 2013168,3950

There have been 38,468,626 shares sold and zero shares purchased this year.

Financials

The company reported the full year 2012 financial results on February 25 with the following highlights:

Revenue$9.0 billion
Net income$243.1 million
Net debt$14.3 billion

Outlook

For the full year 2013, the company forecasts the following:

 

Full Year 2013 Guidance

% Variance YOY

Revenues

$10,850M - $10,950M

20.3% - 21.4%

Corporate EBITDA

$2,210M - $2,270M

35.1% - 38.8%

Adjusted Pre-Tax Income

$1,270M - $1,340M

40.9% - 48.6%

Adjusted Net Income

$830M - $875M

39.5% - 47.1%

Adjusted Diluted Earnings Per Share

$1.82 - $1.92

37.4% - 44.9%

Competition

Hertz's competitors include Avis Budget Group (CAR) and United Rentals (URI). Here is a table comparing these companies.

CompanyHTZCARURIIndustry Average (Rental & Leasing Services)
Market Cap:9.46B2.92B4.73B132.22M
Employees:30,20020,50011,300824.00
Qtrly Rev Growth (yoy):0.150.040.670.43
Revenue:9.02B7.36B4.12B164.84M
Gross Margin:0.240.300.390.52
EBITDA:1.44B1.11B984.00M50.19M
Operating Margin:0.130.140.190.14
Net Income:243.08M290.00M75.00MN/A
EPS:0.542.420.790.18
P/E:41.5411.2664.411,130.00
PEG (5 yr expected):0.430.380.59N/A
P/S:1.050.401.150.93

Hertz's valuation 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. The stock is trading at a P/E ratio of 41.54 and a forward P/E ratio of 9.71. The company has a book value of $5.94 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. RPX Corporation (RPXC) provides patent risk management solutions in the United States, Japan, and internationally.

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Insider selling by insider (last 30 days)

  • Martin Roberts sold 19,820 shares on April 1 pursuant to a 10b5-1 trading plan. Martin Roberts currently holds 134,141 options or 0.3% of the company. Martin Roberts is Senior Vice President, General Counsel & Secretary.
  • Kevin Barhydt sold 10,308 shares on April 1 pursuant to a 10b5-1 trading plan. Kevin Barhydt currently holds 46,500 shares or less than 0.1% of the company. Kevin Barhydt is a Senior Vice President of the company.
  • Steven Swank sold 35,807 shares on March 28 - April 1 pursuant to a 10b5-1 trading plan. Steven Swank currently holds 165,443 options or 0.3% of the company. Steven Swank is a Senior Vice President of the company.
  • Geoffrey Barker sold 60,000 shares on March 5-28 pursuant to a 10b5-1 trading plan. Geoffrey Barker currently holds 1,246,917 shares or 2.4% of the company. Geoffrey Barker is Executive Director and a co-founder of RPX Corp, and served as its Chief Operating Officer until mid-2012.
  • Adam Spiegel sold 74,583 shares on March 15-26 pursuant to a 10b5-1 trading plan. Adam Spiegel currently holds 60,170 shares or 0.1% of the company. Adam Spiegel is Chief Financial Officer of the company.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
April 201330,1280
March 2013170,3900
February 20131,231,25350,000
January 2013124,4000

There have been 1,556,171 shares sold and 50,000 shares purchased this year.

Financials

The company reported the full year 2012 financial results on February 12 with the following highlights:

Revenue$197.7 million
Net income$39.0 million
Cash$199.7 million

Outlook

The company provided the following business outlook for the first quarter of 2013:

Total revenue$60.0 - $60.5 million
Net income (non-GAAP)$15.0 - $15.5 million

The company provided the following business outlook for the full year 2013:

Total revenue$223 - $235 million
Net income (non-GAAP)$47 - $52 million
Net acquisition spend$115 - $125 million

Competition

RPX Corp's competitors include Acacia Research Corporation (ACTG). Here is a table comparing these two companies.

CompanyRPXCACTGIndustry Average (Business Services)
Market Cap:708.66M1.46B3.44B
Employees:125557.50K
Qtrly Rev Growth (yoy):0.222.190.15
Revenue:197.69M250.73M568.50M
Gross Margin:0.580.900.34
EBITDA:144.45M119.58M73.10M
Operating Margin:0.320.370.11
Net Income:38.46M59.45MN/A
EPS:0.741.240.42
P/E:18.5323.9824.31
PEG (5 yr expected):1.520.571.31
P/S:3.585.842.17

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

My analysis

There have been 10 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 18.53 and a forward P/E ratio of 13.77. The company has a book value of $7.08 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: 2 Services And A Sporting Goods Company With Recent Intensive Insider Selling