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There was intensive insider selling in NII Holdings (NASDAQ:NIHD) in May 2011, when the stock was trading at $42. The stock is currently trading at $8.83, or 79% below the May, 2011, price level.

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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. Hasbro (NASDAQ:HAS) provides children's and family leisure time products and services worldwide.

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Insider selling by insider (last 30 days)

  • Duncan Billing sold 47,302 shares on April 24 and currently holds 49,934 shares or less than 0.1% of the company. Duncan Billing is Executive Vice President and Chief Development Officer.
  • David Hargreaves sold 120,645 shares on April 24 and currently holds 224,194 shares or 0.2% of the company. David Hargreaves is Executive Vice President, Chief Strategy Officer.
  • Wiebe Tinga sold 31,006 shares on April 24 and currently holds 34,409 shares or less than 0.1% of the company. Wiebe Tinga is Chief Commercial Officer.
  • Brian Goldner sold 172,888 shares on April 24 and currently holds 57,805 shares or less than 0.1% of the company. Brian Goldner is President and Chief Executive Officer.
  • John Frascotti sold 21,123 shares on April 24 and currently holds 55,340 shares or less than 0.1% of the company. John Frascotti is Global Chief Marketing Officer.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
April 2013392,9640
March 201300
February 2013267,1230
January 201300

The month of April has seen the most insider selling this year.

Financials

The company reported the first-quarter financial results on April 22 with the following highlights:

Revenue$663.7 million
Net loss$6.7 million
Cash$1.1 billion
Debt$1.6 billion

Competition

Hasbro's competitors include JAKKS Pacific (NASDAQ:JAKK) and Mattel (NASDAQ:MAT). Here is a table comparing these companies.

CompanyHASJAKKMAT
Market Cap:6.09B234.27M15.37B
Employees:5,50082828,000
Qtrly Rev Growth (yoy):-0.03-0.050.07
Revenue:4.09B666.76M6.49B
Gross Margin:0.510.300.54
EBITDA:749.25M15.01M1.40B
Operating Margin:0.15-0.010.19
Net Income:336.00M-104.80M799.43M
EPS:2.55-4.372.30
P/E:18.54N/A19.39
PEG (5 yr expected):2.111.241.44
P/S:1.500.352.38

Hasbro's valuation is very similar to Mattel's valuation.

My analysis

There have been five insider sell transactions and there have not been any insider buy transactions during the last 30 days. There is one analyst buy rating, eight neutral ratings and three sell ratings, with an average target price of $38.50. The stock is trading at a P/E ratio of 18.54 and a forward P/E ratio of 15.10. The company has a book value of $11.69 per share and the stock has a dividend yield of 3.38%. 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.

2. iRobot Corporation (NASDAQ:IRBT) designs, develops, and markets robots for the consumer, government, and industrial markets worldwide.

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Insider selling by insider (last 30 days)

  • Jeffrey Beck sold 69,371 shares on April 8-25 pursuant to a Rule 10b5-1 trading plan. Jeffrey Beck currently holds 73,278 shares or 0.3% of the company. Jeffrey Beck is Chief Operating Officer.
  • Glen Weinstein sold 9,000 shares on April 1-25 pursuant to a Rule 10b5-1 trading plan. Glen Weinstein currently holds 62,000 shares or 0.2% of the company. Glen Weinstein is Executive Vice President and Chief Legal Officer.
  • Colin Angle sold 16,361 shares on April 24 pursuant to a Rule 10b5-1 trading plan. Colin Angle currently holds 761,094 shares or 2.7% of the company. Colin Angle is Chief Executive Officer.
  • Alison Dean sold 14,058 shares on April 1-2 pursuant to a Rule 10b5-1 trading plan. Alison Dean currently holds 28,127 shares or 0.1% of the company. Alison Dean is Senior Vice President, Corporate Finance.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
April 2013108,7900
March 201324,6600
February 201300
January 201300

The month of April has seen the most insider selling this year.

Financials

The company reported the first-quarter financial results on April 23 with the following highlights:

Revenue$106.2 million
Net income$8.4 million
Cash$137.4 million

Outlook

The company's guidance for the second quarter and full year is as follows:

Q2/2013FY2013
Revenue$128-$133 million$485-$495 million
Earnings per share$0.15-$0.20$0.80-$1.00

Competition

iRobot's competitors include Electrolux AB (OTCPK:ELUXY) and Lockheed Martin Corporation (NYSE:LMT). Here is a table comparing these companies.

CompanyIRBTELUXYLMT
Market Cap:789.34M7.90B31.47B
Employees:53460,590120,000
Qtrly Rev Growth (yoy):-0.230.03-0.02
Revenue:436.24M16.51B46.96B
Gross Margin:0.420.200.09
EBITDA:40.52M1.19B5.24B
Operating Margin:0.070.050.09
Net Income:17.30M389.73M2.84B
EPS:0.612.728.66
P/E:46.4320.3011.43
PEG (5 yr expected):3.86N/A1.39
P/S:1.820.460.67

iRobot is trading at a higher P/S ratio than its competitors.

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 46.43 and a forward P/E ratio of 31.82. The company has a book value of $9.92 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.

3. Performant Financial Corporation (NASDAQ:PFMT) provides technology-enabled recovery and related analytics services in the United States.

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Insider selling by insider (last 30 days)

  • Parthenon DCS Holdings sold 5,000,000 shares on April 24 pursuant to a secondary public offering. Parthenon DCS Holdings currently holds 17,690,224 shares or 37.9% of the company.
  • Jeffrey Stein sold 13,046 shares on April 24 pursuant to a secondary public offering. Jeffrey Stein currently holds 46,260 shares or 0.1% of the company. Jeffrey Stein has served as a member of the board of directors since January 2004.
  • Bruce Calvin sold 26,000 shares on April 24 pursuant to a secondary public offering. Bruce Calvin currently holds 78,000 options or 0.2% of the company. Bruce Calvin is the Senior Vice President of Corporate Services.
  • Jon Shaver sold 308,448 shares on April 24 pursuant to a secondary public offering. Jon Shaver currently holds 463,987 shares or 1.0% of the company. Jon Shaver is the Chairman of Board of Directors of Performant.
  • Harold Leach sold 100,506 shares on April 24 pursuant to a secondary public offering. Harold Leach currently holds 161,257 options or 0.3% of the company. Harold Leach is the Chief Operating Officer of Performant.
  • Hakan Orvell sold 62,732 shares on April 24 pursuant to a secondary public offering. Hakan Orvell currently holds 28,197 options or less than 0.1% of the company. Hakan Orvell has served as the company's Chief Financial Officer since November 2006.
  • Lisa Im sold 308,448 shares on April 24 pursuant to a secondary public offering. Lisa Im currently holds 1,405,634 shares or 3.0% of the company. Lisa Im is the Chief Executive Officer of Performant Financial Corporation.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
April 20135,819,1800
March 201300
February 20137,587,8520
January 201300

There have been 13,407,032 shares sold and zero shares purchased this year.

Financials

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

Revenue$210.1 million
Net income$23.0 million
Cash$37.8 million
Debt$147.8 million

Outlook

The company gave a first quarter guidance on April 10 as follows:

Revenue$47.5-$50.5 million
Net income$1.3-$1.9 million

Competition

Here is a table comparing Performant Financial to the Business Services industry.

CompanyPFMTIndustry Average (Business Services)
Market Cap:493.36M1.28B
Employees:1,5002.95K
Qtrly Rev Growth (yoy):0.310.05
Revenue:210.07M351.33M
Gross Margin:0.600.29
EBITDA:65.07M84.69M
Operating Margin:0.280.10
Net Income:20.91MN/A
EPS:0.440.16
P/E:24.0034.84
PEG (5 yr expected):0.701.19
P/S:2.452.35

Performant Financial's valuation is in line with the industry average.

My analysis

There have been seven 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 24.00 and a forward P/E ratio of 10.56. The company has a book value of $0.53 per share. I believe there is an opportunity for a short entry. I would place a stop loss at $14, which is the all time high, and a profit target at $8, which is the November, 2012 low. The two main reasons for the proposed short entry are the weak first quarter guidance and the intensive insider selling activity.

Source: 2 Consumer Goods And 1 Business Services Company With Recent Intensive Insider Selling