1 Airline, 1 Railroad And 1 Tech Stock With Recent Intensive Insider Selling

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Includes: GBX, NLSN, SAVE
by: Markus Aarnio

There was intensive insider selling in Ixia (NASDAQ:XXIA) in March, when the stock was trading above $20. The stock is currently trading at $14.78 or 34.3% below the March all-time high.

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With this episode in mind, I screened for stocks that 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. Spirit Airlines (NASDAQ:SAVE) provides low-fare airline services.

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Insider selling by insider (last 30 days)

  • Ben Baldanza sold 60,000 shares on April 12 - May 1, pursuant to a Rule 10b5-1 trading plan. Ben Baldanza currently holds 151,351 shares or 0.2% of the company. Ben Baldanza is President, Chief Executive Officer and Class II Director.
  • Barry Biffle sold 10,000 shares on May 1, pursuant to a Rule 10b5-1 trading plan. Barry Biffle currently controls 61,638 shares or less than 0.1% of the company. Barry Biffle has served as Chief Marketing Officer since February 2005.
  • Thomas Canfield sold 10,000 shares on April 5, pursuant to a Rule 10b5-1 trading plan. Thomas Canfield currently holds 47,694 shares or less than 0.1% of the company. Thomas Canfield has served as Senior Vice President, General Counsel & Secretary since joining Spirit in October 2007.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
May 2013 58,000 0
April 2013 51,000 0
March 2013 106,302 0
February 2013 10,000 0
January 2013 12,000 0
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There have been 237,302 shares sold and zero shares purchased this year.

Financials

The company reported the first-quarter financial results on April 30, with the following highlights:

Revenue $370.4 million
Net income $30.6 million
Cash $483.5 million
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Competition

Spirit's competitors include AMR Corporation (AAMRQ.PK) and JetBlue Airways Corporation (NASDAQ:JBLU). Here is a table comparing these companies.

Company SAVE AAMRQ JBLU Industry Average (Major Airlines)
Market Cap: 2.01B 1.45B 1.93B 24.18B
Employees: 3,033 77,750 12,385 59.33K
Qtrly Rev Growth (yoy): 0.23 0.01 0.08 0.00
Revenue: 1.39B 24.92B 5.08B 3.98B
Gross Margin: 0.28 0.23 0.27 0.23
EBITDA: 201.15M 1.65B 600.25M 429.00M
Operating Margin: 0.13 0.03 0.06 0.04
Net Income: 115.60M -557.00M 112.00M N/A
EPS: 1.59 -1.67 0.36 0.06
P/E: 17.43 N/A 18.98 969.33
PEG (5 yr expected): 0.59 0.59 0.48 0.40
P/S: 1.44 0.06 0.37 5.13
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Spirit is trading at a higher P/S ratio than its direct 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 17.43 and a forward P/E ratio of 11.18. The company has a book value of $8.22 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.

2. The Greenbrier Companies (NYSE:GBX) engages in the design, manufacture, and marketing of railroad freight car equipment in North America and Europe.

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Insider selling by insider (last 30 days)

  • James Sharp sold 7,691 shares on April 5 - May 3, and currently holds 31,030 shares or 0.1% of the company. James Sharp is President, Greenbrier Leasing Corporation.
  • Mark Rittenbaum sold 5,000 shares on April 30, and currently holds 129,900 shares or 0.5% of the company. Mark Rittenbaum is Executive Vice President & Chief Financial Officer.
  • Martin Baker sold 8,000 shares on April 25, and currently holds 32,750 shares or 0.1% of the company. Martin Baker is Senior Vice President, General Counsel & Chief Compliance Officer.
  • Alejandro Centurion sold 8,500 shares on April 5-25, and currently holds 55,560 shares or 0.2% of the company. Alejandro Centurion is President, North American Manufacturing Operations.
  • Maren Malik sold 5,370 shares on April 5-23, and currently holds 18,158 shares or less than 0.1% of the company. Maren Malik is Vice President, Administration.
  • Victoria McManus sold 13,973 shares on April 22, and currently holds 61,206 shares or 0.2% of the company. Victoria McManus serves as a director of the company.
  • Timothy Stuckey sold 1,071 shares on April 22 and currently holds 43,678 shares or 0.2% of the company. Timothy Stuckey is President, Greenbrier Rail Services.
  • Anne Manning sold 650 shares on April 5-8, and currently holds 22,833 shares or less than 0.1% of the company. Anne Manning is Vice President, Corporate Controller.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
May 2013 6,000 0
April 2013 50,517 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 56,517 shares sold and zero shares purchased this year.

Financials

The company reported the fiscal 2013 second-quarter, which ended February 28, financial results on April 4, with the following highlights:

Revenue $423.2 million
Net income $13.8 million
Cash $55.6 million
Debt $477.6 million
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Outlook

Based on current business trends and industry forecasts, management currently anticipates the company's new rail car deliveries in 2013 to be about 13,000 units. Management anticipates that fiscal 2013 revenue, adjusted EBITDA and earnings per share will be similar to fiscal 2012, with the second half of the year being stronger than the first half of the year.

Competition

Greenbrier's competitors include GATX Corp. (GMT) and Trinity Industries (NYSE:TRN). Here is a table comparing these companies.

Company GBX GMT TRN Industry Average (Railroads)
Market Cap: 606.21M 2.40B 3.26B 24.52B
Employees: 7,396 2,046 15,490 30.94K
Qtrly Rev Growth (yoy): -0.08 -0.04 0.04 0.08
Revenue: 1.79B 1.26B 3.85B 5.93B
Gross Margin: 0.12 0.53 0.22 0.36
EBITDA: 148.55M 490.45M 790.50M 1.91B
Operating Margin: 0.06 0.19 0.15 0.24
Net Income: 50.79M 134.10M 264.50M N/A
EPS: 1.67 2.81 3.53 3.28
P/E: 13.38 18.20 11.68 39.55
PEG (5 yr expected): 1.03 1.04 1.02 1.09
P/S: 0.33 1.86 0.84 3.72
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Greenbrier is trading below the industry average P/S ratio.

My analysis

There have been 20 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 13.38 and a forward P/E ratio of 8.84. The company has a book value of $16.93 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. Nielsen Holdings (NYSE:NLSN), an information and measurement company, provides media and marketing information, analytics, and industry expertise about what consumers buy and watch on a global and local basis.

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Insider selling by insider (last 30 days)

  • Susan Whiting sold 15,000 shares on May 1, pursuant to a Rule 10b5-1 trading plan. Susan Whiting currently holds 99,046 shares or less than 0.1% of the company. Susan Whiting is Vice Chair of Nielsen.
  • David Calhoun sold 333,334 shares on April 29 - May 1, pursuant to a Rule 10b5-1 trading plan. David Calhoun currently holds 765,910 shares or 0.2% of the company. David Calhoun is Chief Executive Officer of Nielsen.
  • Brian West sold 7,370 shares on April 25, pursuant to a Rule 10b5-1 trading plan. Brian West currently holds 105,913 shares or less than 0.1% of the company. Brian West serves as Chief Financial Officer for Nielsen.
  • Stephen Hasker sold 12,338 shares on May 1, pursuant to a Rule 10b5-1 trading plan. Stephen Hasker currently holds 28,569 shares or less than 0.1% of the company. Stephen Hasker is President, Global Product Leadership.
  • Mitchell Habib sold 20,039 shares on May 1, pursuant to a Rule 10b5-1 trading plan. Mitchell Habib currently holds 33,819 shares or less than 0.1% of the company. Mitchell Habib serves as Chief Operating Officer for Nielsen.
  • Itzhak Fisher sold 30,876 shares on April 15, pursuant to a Rule 10b5-1 trading plan. Itzhak Fisher currently controls 78,046 shares or less than 0.1% of the company. Itzhak Fisher serves as Executive Vice President, Global Business Development for Nielsen.
  • James Cuminale sold 25,000 shares on April 15, pursuant to a Rule 10b5-1 trading plan. James Cuminale currently holds 165,406 shares or less than 0.1% of the company. James Cuminale serves as Chief Legal Officer of Nielsen.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
May 2013 47,377 0
April 2013 772,373 0
March 2013 272,325 0
February 2013 40,803,198 0
January 2013 0 0
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There have been 41,895,273 shares sold and zero shares purchased this year.

Financials

The company reported the first-quarter financial results on April 25, with the following highlights:

Revenue $1.4 billion
Net income $35 million
Cash $233 million
Debt $6.3 billion
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Outlook

The company's outlook for 2013 is as follows:

  • Revenue growth 4.0% -5.0%.
  • Adjusted EBITDA margin growth 40 to 60 bps.
  • Adjusted net income growth 15-19%.
  • Reported Adj. net income per share at current rates: $2.13 - $2.19.

Competition

Here is a table comparing Nielsen against the Information & Delivery Services industry.

Company NLSN Industry Average (Information & Delivery Services)
Market Cap: 13.36B 3.09B
Employees: 35,000 4.60K
Qtrly Rev Growth (yoy): 0.03 0.25
Revenue: 5.65B 834.14M
Gross Margin: 0.59 0.65
EBITDA: 1.56B 317.16M
Operating Margin: 0.19 0.11
Net Income: 284.00M N/A
EPS: 0.78 0.84
P/E: 45.99 27.62
PEG (5 yr expected): 1.11 1.36
P/S: 2.36 2.36
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Nielsen's P/S ratio 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 45.99 and a forward P/E ratio of 14.91. The company has a book value of $13.86 per share and the stock has a dividend yield of 1.80%. 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.