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There was intensive insider selling in Aruba Networks (ARUN) in March when the stock was trading above $25. The stock is currently trading at $17.84 or 33.4% below the peak 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. CBS Corporation (CBS) operates as a mass media company in the United States and internationally.

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Insider selling by insider (last 30 days)

  • Louis Briskman sold 128,000 shares on May 1-9 and currently holds 309,883 shares or less than 0.1% of the company. Louis Briskman serves as the Executive Vice President and General Counsel of CBS Corporation.
  • Linda Griego sold 11,161 shares on May 8 and currently holds 27,270 shares or less than 0.1% of the company. Linda Griego serves as a director of the company.
  • Leonard Goldberg sold 36,501 shares on May 8 and currently holds 38,910 shares or less than 0.1% of the company. Leonard Goldberg serves as a director of the company.
  • Frederic Salerno sold 22,686 shares on May 3 and currently holds 36,556 shares or less than 0.1% of the company. Frederic Salerno serves as a director of the company.
  • Anthony Ambrosio sold 9,683 shares on May 2 pursuant to a Rule 10b5-1 trading plan. Anthony Ambrosio currently holds 97,851 shares or less than 0.1% of the company. Anthony Ambrosio serves as Executive Vice President, Human Resources and Administration for CBS Corporation.
  • Gil Schwartz sold 21,388 shares on May 3 and currently holds 90,122 shares or less than 0.1% of the company. Gil Schwartz serves as Executive Vice President and Chief Communications Officer for CBS Corporation.
  • Leslie Moonves sold 250,000 shares on May 1-2 pursuant to a Rule 10b5-1 trading plan. Leslie Moonves currently holds 1,268,754 shares or 0.2% of the company. Leslie Moonves is president and chief executive officer of CBS Corporation.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 2013479,4190
April 2013287,6830
March 2013808,5610
February 2013477,8800
January 201325,0000

There have been 2,078,543 shares sold and zero shares purchased this year.

Financials

The company reported the first-quarter financial results on May 1 with the following highlights:

Revenue$4.0 billion
Net income$443 million
Cash$409 million
Debt$5.9 billion

Competition

CBS Corporation's competitors include News Corp. (NWS) and The Walt Disney Company (DIS). Here is a table comparing these companies.

CompanyCBSNWSDISIndustry Average (Broadcasting - TV)
Market Cap:30.84B79.83B121.04B14.46B
Employees:20,93048,000166,0004.50K
Qtrly Rev Growth (yoy):0.060.140.100.17
Revenue:14.33B35.47B43.76B5.43B
Gross Margin:0.440.380.210.41
EBITDA:3.60B6.98B11.35B2.15B
Operating Margin:0.220.160.210.22
Net Income:1.70B5.92B5.97BN/A
EPS:2.542.503.300.02
P/E:19.7813.4820.3524.16
PEG (5 yr expected):1.15N/A1.542.15
P/S:2.102.232.772.50

CBS Corporation is growing below the industry average growth rate.

My analysis

There have been eight 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 19.78 and a forward P/E ratio of 14.36. The company has a book value of $15.32 per share and the stock has a dividend yield of 0.98%. 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 slow revenue growth and the intensive insider selling activity.

2. DirecTV (DTV) provides digital television entertainment in the United States and Latin America.

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Insider selling by insider (last 30 days)

  • John Murphy sold 12,262 shares on May 13 and currently holds zero shares of the company. John Murphy currently serves as Senior Vice President, Controller and Chief Accounting Officer.
  • Romulo Pontual sold 15,236 shares on May 10 and currently holds 22,973 shares or less than 0.1% of the company. Romulo Pontual currently serves as Executive Vice President and Chief Technology Officer of the company.
  • Larry Hunter sold 10,000 shares on May 9 and currently holds 61,796 shares or less than 0.1% of the company. Larry Hunter serves as Executive Vice President and General Counsel of the company.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 201337,4980
April 201300
March 201350,0000
February 201320,0000
January 201300

There have been 107,498 shares sold and zero shares purchased this year.

Financials

The company reported the first-quarter financial results on May 7 with the following highlights:

Revenue$7.6 billion
Net income690 million
Cash$1.7 billion
Debt$18.4 billion

Outlook

The company is forecasting earnings per share to be $5 or greater in 2013.

Competition

DirecTV's competitors include Comcast Corporation (CMCSA) and Dish Network Corp. (DISH). Here is a table comparing these companies.

CompanyDTVCMCSADISHIndustry Average (CATV Systems)
Market Cap:36.77B114.13B17.57B70.99B
Employees:27,200129,00035,00050.25K
Qtrly Rev Growth (yoy):0.080.03-0.010.24
Revenue:30.27B63.00B14.24B19.58B
Gross Margin:0.480.680.390.54
EBITDA:7.41B20.32B2.94B5.25B
Operating Margin:0.170.200.140.13
Net Income:2.91B6.42B491.98MN/A
EPS:4.712.371.092.37
P/E:13.6418.2535.6317.35
PEG (5 yr expected):0.701.033.061.06
P/S:1.211.811.242.51

DirecTV is trading below the industry average P/S ratio.

My analysis

There have been three 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 13.64 and a forward P/E ratio of 10.83. The company has a book value of -$9.26 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 book value and the intensive insider selling activity.

3. Omnicell (OMCL) provides automated solutions for medication and supply management in healthcare in the United States and internationally.

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Insider selling by insider (last 30 days)

  • Sara White sold 7,200 shares on May 10 and currently holds 26,025 shares or less than 0.1% of the company. Sara White has served as a Director of Omnicell since April 2003.
  • Dan Johnston sold 8,000 shares on May 7 pursuant to a Rule 10b5-1 plan. Dan Johnston currently holds 74,885 shares or 0.2% of the company. Dan Johnston is Executive Vice President and General Counsel of Omnicell.
  • Robin Seim sold 25,000 shares on May 1 pursuant to a Rule 10b5-1 plan. Robin Seim currently holds 87,732 shares or 0.3% of the company. Robin Seim is Executive Vice President and Chief Financial Officer.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 201340,2000
April 201325,0000
March 2013116,2870
February 2013171,8780
January 201314,5960

There have been 367,961 shares sold and zero shares purchased this year.

Financials

The company reported the first-quarter financial results on May 2 with the following highlights:

Revenue$87.1 million
Net income$3.4 million
Cash$69.8 million

Outlook

  • The company expects 2013 revenue to be between $370 million and $380 million, an increase of 18% to 21% over last year.
  • The company expects 2013 non-GAAP earnings to be $0.99 to $1.07 per share, up 14% to 22% year-to-year.

Competition

Omnicell's competitors include AmerisourceBergen (ABC), CareFusion (CFN) and McKesson (MCK). Here is a table comparing these companies.

 

 

 

 

CompanyOMCLABCCFNMCKIndustry Average (Computer Based Systems)
Market Cap:632.57M12.66B7.53B26.09B70.73B
Employees:1,08913,00015,00043,500442.26K
Qtrly Rev Growth (yoy):0.360.02-0.02-0.030.00
Revenue:336.99M81.38B3.61B122.46B33.54B
Gross Margin:0.540.030.510.060.48
EBITDA:43.11M1.42B857.00M2.90B943.37M
Operating Margin:0.090.020.180.020.02
Net Income:17.21M706.22M370.00M1.34BN/A
EPS:0.502.301.665.591.10
P/E:37.3223.8720.3920.59124.55
PEG (5 yr expected):1.191.531.331.11N/A
P/S:1.880.162.090.210.88

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

My analysis

There have been three 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 37.32 and a forward P/E ratio of 15.55. The company has a book value of $9.37 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 Companies And 1 Tech Stock With Recent Intensive Insider Selling