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There was intensive insider selling in Vitamin Shoppe (NYSE:VSI) in September, 2012, when the stock was trading above $58. The stock is currently trading at $45.23 or 31.4% below the all time high made in February.


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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. 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)

  • Michael Step sold 30,301 shares on May 6 pursuant to a Rule 10b5-1 trading plan. Michael Step currently holds 60,609 options or less than 0.1% of the company. Michael Step is Senior Vice President, Corporate Development.
  • Gerald Proehl sold 86,603 shares on May 6 pursuant to a Rule 10b5-1 trading plan. Gerald Proehl currently controls 457,707 shares or 0.7% of the company. Gerald Proehl is a Director, President and Chief Executive Officer of the company.
  • Warren Hall sold 28,749 shares on May 3 pursuant to a Rule 10b5-1 trading plan. Warren Hall currently holds 9,691 shares or less than 0.1% of the company. Warren Hall is Senior Vice President, Manufacturing and Product Development.
  • David Ballard sold 9,000 shares on May 2 pursuant to a Rule 10b5-1 trading plan. David Ballard currently holds 27,000 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 May 1 pursuant to a Rule 10b5-1 trading plan. William Denby currently holds 37,045 options or less than 0.1% of the company. William Denby is Senior Vice President, Commercial Operations.
  • Daniel Burgess sold 8,000 shares on May 1 pursuant to a Rule 10b5-1 trading plan. Daniel Burgess currently holds 8,000 options or less than 0.1% of the company. Daniel Burgess has served as a member of the board of directors since July 2004.
  • Debra Crawford sold 19,000 shares on April 10 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.
  • Julie De Meules sold 15,165 shares on April 9 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.
  • Maria Bedoya-Toro sold 10,000 shares on April 8 pursuant to a Rule 10b5-1 trading plan. Maria Bedoya-Toro currently holds 48,593 shares or less than 0.1% of the company. Maria Bedoya-Toro is Senior Vice President, Regulatory Affairs and Quality Assurance.
  • Carey Fox sold 17,100 shares on April 8 pursuant to a Rule 10b5-1 trading plan. Carey Fox currently holds 24,134 shares or less than 0.1% of the company. Carey Fox is Senior Vice President, General Counsel.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
May 2013 187,103 0
April 2013 198,316 0
March 2013 334,366 0
February 2013 287,369 0
January 2013 0 0

There have been 890,250 shares sold and zero shares purchased this year.

Financials

The company reported the first-quarter financial results on May 6 with the following highlights:

Revenue $79.4 million
Net income $18.7 million
Cash $97.6 million
Debt $9.9 million

Outlook

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

  • Total revenues of approximately $330 million to $340 million.
  • Net income of approximately $57 million to $64 million, and diluted EPS of $0.72 to $0.81.
  • Adjusted EBITDA, or non-GAAP adjusted earnings, of approximately $81 million to $91 million and non-GAAP adjusted diluted EPS of $1.03 to $1.15.

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: 1.34B 64.19B 180.14B 212.40B 101.16M
Employees: 290 51,700 129,000 126,000 53.00
Qtrly Rev Growth (yoy): 0.65 -0.13 0.02 0.02 0.18
Revenue: 217.96M 27.01B 57.80B 83.72B 14.05M
Gross Margin: 0.61 0.81 0.68 0.50 0.68
EBITDA: 26.45M 11.09B 17.15B 19.70B -6.80M
Operating Margin: 0.09 0.33 0.22 0.20 -0.94
Net Income: 18.56M 5.68B 9.66B 11.36B N/A
EPS: 0.27 4.52 3.94 4.46 -0.13
P/E: 77.61 11.36 18.61 17.36 18.02
PEG (5 yr expected): 1.28 -1.07 2.73 2.45 N/A
P/S: 5.53 2.39 3.10 2.55 9.21

Santarus is growing faster than the industry.

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 77.61 and a forward P/E ratio of 15.10. 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. TE Connectivity (NYSE:TEL) designs and manufactures products that connect and protect the flow of power and data inside the products used by consumers and industries.


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Insider selling by insider (last 30 days)

  • Robert Shaddock sold 6,000 shares on May 6 and currently holds 11,290 shares or less than 0.1% of the company. Robert Shaddock is Executive Vice President & Chief Technology Officer at TE Connectivity.
  • Robert Ott sold 3,731 shares on May 3 pursuant to a Rule 10b5-1 trading plan. Robert Ott currently holds 10,745 shares or less than 0.1% of the company. Robert Ott is Senior Vice President & Corporate Controller.
  • Joseph Donahue sold 4,500 shares on May 1 pursuant to a Rule 10b5-1 trading plan. Joseph Donahue currently holds 25,225 shares or less than 0.1% of the company. Joseph Donahue is Executive Vice President & Chief Operating Officer of TE Connectivity and President of TE's Network Solutions segment.
  • Steven Merkt sold 4,068 shares on April 30 and currently holds 758 shares or less than 0.1% of the company. Steven Merkt is President, Transportation Solutions for TE Connectivity.
  • Mario Calastri sold 15,000 shares on April 30 and currently holds 17,806 shares or less than 0.1% of the company. Mario Calastri is Senior Vice President & Treasurer.
  • Thomas Lynch sold 59,834 shares on April 11 pursuant to a Rule 10b5-1 trading plan. Thomas Lynch currently holds 307,396 shares or less than 0.1% of the company. Thomas Lynch is Chairman and Chief Executive Officer of TE Connectivity.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
May 2013 14,231 0
April 2013 78,902 0
March 2013 59,837 0
February 2013 112,150 0
January 2013 151,714 0

There have been 416,834 shares sold and zero shares purchased this year.

Financials

The company reported the fiscal 2013 second-quarter, which ended March 29, financial results on April 24 with the following highlights:

Revenue $3.3 billion
Net income $277 million
Cash $1.1 billion
Debt $3.0 billion

Outlook

  • For the third quarter, the company expects net sales of $3.325 to $3.425 billion and adjusted EPS of $0.80 to $0.84. GAAP EPS are expected to be $0.65 to $0.69, including restructuring and acquisition-related charges of $0.15.
  • For the full year, the company expects net sales of $13.075 to $13.375 billion and adjusted EPS of $3.10 to $3.22. GAAP EPS are expected to be $2.80 to $2.92, including restructuring and acquisition-related charges of $0.50 and income from tax-related items of $0.20.

Competition

TE Connectivity's competitors include Alcatel-Lucent (NYSE:ALU), Corning (NYSE:GLW) and Molex Incorporated (NASDAQ:MOLX). Here is a table comparing these companies.

Company TEL ALU GLW MOLX Industry Average (Diversified Electronics)
Market Cap: 18.68B 3.25B 21.93B 5.11B 130.65M
Employees: 88,000 72,344 28,700 34,226 1.03K
Qtrly Rev Growth (yoy): 0.01 -0.01 -0.06 0.02 0.12
Revenue: 13.26B 18.70B 7.91B 3.60B 210.54M
Gross Margin: 0.31 0.30 0.42 0.30 0.26
EBITDA: 2.34B 964.55M 2.47B 606.48M 7.62M
Operating Margin: 0.13 0.01 0.18 0.10 0.02
Net Income: 1.22B -2.64B 1.75B 258.44M N/A
EPS: 2.69 -0.78 1.17 1.45 0.02
P/E: 16.73 N/A 12.72 19.85 15.08
PEG (5 yr expected): 1.07 0.32 0.94 1.80 0.94
P/S: 1.41 0.16 2.78 1.42 0.62

TE Connectivity 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 16.73 and a forward P/E ratio of 12.71. The company has a book value of $18.53 per share and the stock has a dividend yield of 1.87%. 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. Concur Technologies (NASDAQ:CNQR) provides integrated travel and expense management solutions for companies of various industries, sizes, and geographies worldwide.


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Insider selling by insider (last 30 days)

  • John Torrey sold 3,433 shares on May 6 and currently holds 12,860 shares or less than 0.1% of the company. John Torrey joined Concur in October 2007 and serves as Executive Vice President of Corporate Strategy.
  • Kyle Sugamele sold 4,805 shares on May 6 and currently holds 32,931 shares or less than 0.1% of the company. Kyle Sugamele is Chief Legal Officer and Corporate Secretary.
  • Elena Donio sold 3,000 shares on May 6 and currently holds 32,748 shares or less than 0.1% of the company. Elena Donio joined Concur in 1998 and became Executive Vice President and General Manager, Small & Mid-Size Businesses in 2010.
  • Randall Talbot sold 3,874 shares on May 6 and currently holds 16,856 shares or less than 0.1% of the company. Randall Talbot has been a director of Concur since March 2008.
  • Francis Pelzer sold 1,900 shares on April 17 - May 3 and currently holds 17,822 shares or less than 0.1% of the company. Francis Pelzer joined Concur in May 2010 as its Chief Financial Officer.
  • Steve Singh sold 19,000 shares on April 17 - May 1 pursuant to a 10b5-1 trading plan. Steve Singh currently holds 1,048,440 shares or 1.9% of the company. Steve Singh has served as Concur's Chief Executive Officer since 1996 and director since 1993, including serving as Chairman of the Board of Directors since September 1999.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
May 2013 26,712 0
April 2013 10,700 0
March 2013 16,700 0
February 2013 95,555 0
January 2013 23,500 0

There have been 173,167 shares sold and zero shares purchased this year.

Financials

The company reported the fiscal 2013 second-quarter, which ended March 31, financial results on May 1 with the following highlights:

Revenue $127.4 million
Net loss $7.6 million
Cash $466.3 million
Debt $258.0 million
Outlook

  • Concur expects revenue for the third quarter of fiscal 2013 to grow approximately 23% year-over-year from the third quarter of fiscal 2012. For the third quarter of fiscal 2013, Concur expects non-GAAP pretax income per share to be $0.37.
  • Concur expects fiscal 2013 revenue to grow approximately 23% year-over-year from fiscal 2012.
  • Concur expects fiscal 2013 non-GAAP pretax income per share to be at least $1.40.
  • Concur expects fiscal 2013 non-GAAP operating margin to be approximately 16% to 19%.
  • Concur expects cash flows from operations in fiscal 2013 to be at least $80 million, excluding the TripIt contingent consideration settlement, excess tax benefits from share based compensation, and acquisition and other related costs. The company expects capital expenditures to be slightly greater than typical range of 6% to 8% of fiscal 2013 revenue.

Competition

Concur's competitors include Compuware (NASDAQ:CPWR), Oracle (NYSE:ORCL) and SAP AG (NYSE:SAP). Here is a table comparing these companies.

Company CNQR CPWR ORCL SAP Industry Average (Technical & System Software)
Market Cap: 4.54B 2.51B 156.68B 97.65B 11.39B
Employees: 2,400 4,564 115,000 64,598 6.87K
Qtrly Rev Growth (yoy): 0.18 0.02 -0.01 0.08 0.33
Revenue: 481.22M 970.67M 37.15B 21.33B 5.01B
Gross Margin: 0.72 0.66 0.80 0.72 0.67
EBITDA: 37.80M 163.07M 17.29B 7.22B 558.48M

Operating Margin:

-0.01 0.12 0.39 0.28 0.17
Net Income: -20.98M 73.52M 10.57B 3.75B N/A

EPS:

-0.38 0.33 2.15 3.15 0.73
P/E: N/A 35.82 15.48 26.02 25.52
PEG (5 yr expected): 3.78 5.95 1.16 1.58 2.92
P/S: 9.43 2.58 4.22 4.58 4.50

Concur 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. There are eight analyst buy ratings, 11 neutral ratings and four sell ratings, with an average target price of $71.71. The stock is trading at a forward P/E ratio of 66.13 and the company has a book value of $13.16 per share. Before entering short this stock, I would like to get a bearish confirmation from the Point and Figure chart. The four main reasons for the proposed short entry are relatively high P/S ratio, negative earnings, bearish analyst target prices and the intensive insider selling activity.

Source: 2 Tech Stocks And 1 Biotech With Recent Intensive Insider Selling