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There was intensive insider selling in Affymax (OTCPK:AFFY) in October, 2012. The stock peaked at $27.74 on October 17, 2012 and has plunged all the way to $1.11 as of April 9, 2013 or 96.0% 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. Best Buy (NYSE:BBY) operates as an e-commerce and physical retailer of consumer electronics primarily in the United States, Europe, Canada, and China.


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Insider selling by insider (last 30 days)

  • Lisa Caputo sold 2,824 shares on April 5 and currently holds 10,000 shares or less than 0.1% of the company. Lisa Caputo serves as a director of the company.
  • Matthew Paull sold 6,500 shares on April 5 and currently holds 18,169 shares or less than 0.1% of the company. Matthew Paull serves as a director of the company.
  • Bradbury Anderson sold 11,250 shares on April 4 and currently controls 241,094 shares or less than 0.1% of the company. Bradbury Anderson serves as a director of the company.
  • Allen Lenzmeier sold 11,250 shares on April 4 and currently controls 807,155 shares or 0.2% of the company. Allen Lenzmeier serves as a director of the company.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
April 2013 31,824 0
March 2013 0 0
February 2013 0 0
January 2013 0 0

The month of April 2013 has seen all of the insider selling.

Financials

The company reported the full fiscal year 2013, which ended February 2, financial results on March 1 with the following highlights:

Revenue $49.6 billion
Net loss $249 million
Cash $1.8 billion
Debt $2.3 billion

Competition

Best Buy's competitors include Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Wal-Mart Stores (NYSE:WMT). Here is a table comparing these companies.

Company BBY AMZN AAPL WMT Industry Average (Electronics Stores)
Market Cap: 8.59B 118.07B 397.91B 255.03B 3.53B
Employees: 165,000 88,400 72,800 2,200,000 17.00K
Qtrly Rev Growth (yoy): 0.00 0.22 0.18 0.04 0.33
Revenue: 49.18B 61.09B 164.69B 469.16B 8.89B
Gross Margin: 0.24 0.25 0.42 0.25 0.30
EBITDA: 2.16B 2.51B 59.26B 36.30B 818.00M
Operating Margin: 0.03 0.01 0.33 0.06 0.12
Net Income: -483.27M -39.00M 41.75B 17.00B N/A
EPS: -1.42 -0.09 44.11 5.02 -2.13
P/E: N/A N/A 9.61 15.43 N/A
PEG (5 yr expected): -3.24 4.72 0.51 1.57 0.92
P/S: 0.18 1.93 2.43 0.54 0.40

Best Buy is growing slower than the industry, 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 forward P/E ratio of 11.05 and the company has a book value of $9.05 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 earnings and the intensive insider selling activity.

2. Santarus (NASDAQ:SNTS), a specialty biopharmaceutical company, engages in acquiring, developing, and commercializing proprietary products that address the needs of patients treated by physician specialists.


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Insider selling by insider (last 30 days)

  • Gerald Proehl sold 86,601 shares on April 4 pursuant to a Rule 10b5-1 trading plan. Gerald Proehl currently holds 457,707 shares or 0.7% of the company. Gerald Proehl is a Director, President and Chief Executive Officer of the company.
  • David Ballard sold 18,000 shares on April 2 pursuant to a Rule 10b5-1 trading plan. David Ballard currently holds 36,000 options or less than 0.1% of the company. David Ballard is Senior Vice President, Medical Affairs and Pharmacovigilance.
  • William Denby sold 24,450 shares on April 1 pursuant to a Rule 10b5-1 trading plan. William Denby currently holds 4,852 shares or less than 0.1% of the company. William Denby is Senior Vice President, Commercial Operations.
  • Daniel Burgess sold 8,000 shares on April 1 pursuant to a Rule 10b5-1 trading plan. Daniel Burgess currently holds 28,000 options or less than 0.1% of the company. Daniel Burgess has served as a member of the board of directors since July 2004.
  • Julie De Meules sold 15,165 shares on March 11 pursuant to a Rule 10b5-1 trading plan. Julie De Meules currently holds 4,948 shares or less than 0.1% of the company. Julie De Meules serves as Senior Vice President, Human Resources.
  • Debra Crawford sold 19,000 shares on March 11 pursuant to a Rule 10b5-1 trading plan. Debra Crawford currently holds 165,964 shares or 0.3% of the company. Debra Crawford is Senior Vice President, Chief Financial Officer, Treasurer and Secretary.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
April 2013 137,051 0
March 2013 334,366 0
February 2013 287,369 0
January 2013 0 0

There have been 758,786 shares sold and zero shares purchased this year.

Financials

The company reported the full year 2012 financial results on March 4 with the following highlights:

Revenue $218.0 million
Net income $18.6 million
Cash $94.7 million
Debt $9.9 million

Outlook

Santarus' financial outlook for full year 2013 is as follows:

  • Total revenues of approximately $320 million to $325 million.
  • Net income of approximately $50 million to $54 million, and diluted EPS of $0.63 to $0.68.
  • Adjusted EBITDA, or non-GAAP adjusted earnings, of approximately $73 million to $79 million and non-GAAP adjusted diluted EPS of $0.92 to $1.00.

Competition

Santarus' competitors include AstraZeneca (NYSE:AZN), Novartis (NYSE:NVS) and Procter & Gamble (NYSE:PG). Here is a table comparing these companies.

Company SNTS AZN NVS PG Industry Average (Biotechnology)
Market Cap: 1.09B 63.10B 173.03B 213.83B 95.50M
Employees: 290 51,700 127,724 126,000 87.00
Qtrly Rev Growth (yoy): 0.65 -0.16 0.01 0.02 0.00
Revenue: 217.96M 27.97B 57.50B 83.32B 5.87M
Gross Margin: 0.61 0.81 0.68 0.50 0.75
EBITDA: 26.45M 11.86B 16.88B 19.67B -18.99M
Operating Margin: 0.09 0.35 0.21 0.20 -1.14
Net Income: 18.56M 6.30B 9.50B 11.17B N/A
EPS: 0.27 4.98 3.89 4.41 -0.23
P/E: 63.22 10.16 18.38 17.77 N/A
PEG (5 yr expected): 1.21 -0.92 2.74 2.50 N/A
P/S: 5.03 2.25 3.01 2.58 11.59

Santarus' P/S ratio is below the industry average.

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 63.22 and a forward P/E ratio of 14.53. 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. Integrys Energy Group (NYSE:TEG), a diversified energy holding company, engages in natural gas and electric utility operations, and non regulated energy operations in the United States and Canada.


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Insider selling by insider (last 30 days)

  • Phillip Mikulsky sold 13,599 shares on April 2-4 and currently holds 5,765 shares or less than 0.1% of the company. Phillip Mikulsky is executive vice president of business performance and shared services for Integrys Energy Group.
  • Mark Radtke sold 8,000 shares on April 2 and currently holds 21,981 shares or less than 0.1% of the company. Mark Radtke is executive vice president and chief strategy officer for Integrys Energy Group.
  • Daniel Verbanac sold 4,500 shares on March 13 - April 1 and currently holds 6,740 shares or less than 0.1% of the company. Daniel Verbanac is the president of Integrys Energy Services, a diversified nonregulated energy supply and services subsidiary of Integrys Energy Group.
  • Joseph O'Leary sold 155,876 shares on March 21-28 and currently holds 8,974 shares or less than 0.1% of the company. Joseph O'Leary is senior vice president for Integrys Energy Group.

Insider selling by calendar month

Here is a table of Integrys Energy Group's insider trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
April 2013 22,099 0
March 2013 210,681 0
February 2013 0 0

There have been 232,780 shares sold and zero shares purchased since February.

Financials

The company reported the full year 2012 financial results on February 28 with the following highlights:

Revenue $4.2 billion
Net income $281.4 million
Cash $27.4 million
Debt $2.7 billion

Outlook

Integrys Energy Group's guidance range for 2013 diluted earnings per share on a GAAP basis is between $3.03 and $3.53.

Competition

Integrys Energy Group's competitors include Alliant Energy Corporation (NYSE:LNT) and Wisconsin Energy (NYSE:WEC). Here is a table comparing these companies.

Company TEG LNT WEC Industry Average (Gas Utilities)
Market Cap: 4.64B 5.65B 9.90B 3.81B
Employees: 4,717 4,055 4,504 1.74K
Qtrly Rev Growth (yoy): 0.07 -0.01 -0.04 0.13
Revenue: 4.21B 3.09B 4.25B 3.39B
Gross Margin: 0.19 0.31 0.36 0.33
EBITDA: 718.20M 907.60M 1.37B 713.37M
Operating Margin: 0.11 0.17 0.24 0.15
Net Income: 291.10M 324.90M 546.30M N/A
EPS: 3.55 2.88 2.35 0.97
P/E: 16.77 17.66 18.40 18.06
PEG (5 yr expected): 3.04 2.73 3.28 2.83
P/S: 1.11 1.83 2.33 0.95

Integrys Energy Group's valuation is in line with the industry average.

My analysis

There have been 12 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 16.77 and a forward P/E ratio of 16.67. The company has a book value of $39.49 per share and the stock has a dividend yield of 4.55%. 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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: 1 Electronics Store, 1 Biotech And An Energy Company With Recent Intensive Insider Selling