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There was intensive insider selling in Stage Stores (NYSE:SSI) in April when the stock was trading above $26. The stock is currently trading at $23.59, or 20.3% below the all time high made in April.

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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. Hertz Global Holdings (NYSE:HTZ) engages in the car and equipment rental businesses worldwide.

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Insider selling by insider (last 30 days)

  • Michel Taride sold 17,417 shares on May 20-22 pursuant to a trading plan meeting the requirements of SEC Rule 10b5-1. Michel Taride currently holds 121,067 shares or less than 0.1% of the company. Michel Taride is Executive Vice President and President, Hertz International.
  • LeighAnne Baker sold 17,416 shares on May 20-22 pursuant to a trading plan meeting the requirements of SEC Rule 10b5-1. LeighAnne Baker currently holds 90,641 shares or less than 0.1% of the company. LeighAnne Baker has served as the Executive Vice President and Chief Human Resources Officer of Hertz Holdings and Hertz since April 2007.
  • Jatindar Kapur sold 67,800 shares on May 8-22 pursuant to a trading plan meeting the requirements of SEC Rule 10b5-1. Jatindar Kapur currently holds 69,794 shares or less than 0.1% of the company. Jatindar Kapur has served as Senior Vice President, Finance and Corporate Controller of Hertz and Hertz Holdings since April 2008.
  • Scott Sider sold 55,000 shares on May 8-15 pursuant to the Rule 10b5-1 trading plan. Scott Sider currently holds 87,034 shares or less than 0.1% of the company. Scott Sider has served as the Group President, Rent A Car Americas of Hertz and Hertz Holdings since January 2010.
  • Elyse Douglas sold 110,000 shares on May 8-15 pursuant to the Rule 10b5-1 trading plan. Elyse Douglas currently holds 183,599 shares or less than 0.1% of the company. Elyse Douglas has served as the Senior Executive Vice President and Chief Financial Officer of Hertz Holdings and Hertz since October 2007.
  • Clayton, Dubilier & Rice, LLC, The Carlyle Group and BofA Merrill Lynch sold 49,800,405 shares on May 9 pursuant to a public offering. The group currently holds 172,012 shares or less than 0.1% of Hertz Global Holdings.
  • Richard Broome sold 25,000 shares on May 10 and currently holds 20,971 shares or less than 0.1% of the company. Richard Broome has served as the Executive Vice President, Corporate Affairs and Communications of Hertz Holdings and Hertz since March 2008.
  • Jeffrey Zimmerman sold 30,000 shares on May 8 pursuant to the Rule 10b5-1 trading plan. Jeffrey Zimmerman currently holds 67,301 shares or less than 0.1% of the company. Jeffrey Zimmerman has served as the Executive Vice President and General Counsel of Hertz Holdings and Hertz since December 2007.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 201350,123,0380
April 2013638,2990
March 201337,987,5270
February 2013152,4860
January 2013168,3950

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

Financials

The company reported the first quarter financial results on April 29 with the following highlights:

Revenue$2.4 billion
Net income$18.0 million
Net debt$15.2 billion

Outlook

For the full year 2013, the company forecasts the following:

Full Year 2013 Guidance

% Variance YOY

Revenues

$10,850M - $10,950M

20.3% - 21.4%

Corporate EBITDA

$2,210M - $2,270M

35.1% - 38.8%

Adjusted Pre-Tax Income

$1,270M - $1,340M

40.9% - 48.6%

Adjusted Net Income

$830M - $875M

39.5% - 47.1%

Adjusted Diluted Earnings Per Share

$1.82 - $1.92

37.4% - 44.9%

Competition

Hertz's competitors include Avis Budget Group (NASDAQ:CAR) and United Rentals (NYSE:URI). Here is a table comparing these companies.

CompanyHTZCARURIIndustry Average (Rental & Leasing Services)
Market Cap:10.46B3.63B5.40B199.27M
Employees:30,20020,50011,400120.00
Qtrly Rev Growth (yoy):0.240.040.680.43
Revenue:9.50B7.42B4.56B142.39M
Gross Margin:0.250.290.390.97
EBITDA:1.58B1.06B1.10B100.83M
Operating Margin:0.140.130.190.35
Net Income:317.38M267.00M83.00MN/A
EPS:0.692.220.800.41
P/E:38.0415.1671.1317.77
PEG (5 yr expected):0.460.440.561.19
P/S:1.060.461.161.20

Hertz's P/S ratio is in line with the industry average.

My analysis

There have been eight different insiders selling the shares and there have not been any insiders buying the shares during the past 30 days. The company has an insider ownership of 0.31%. The stock is trading at a P/E ratio of 38.04 and a forward P/E ratio of 10.12. The company has a book value of $5.09 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. Aceto Corporation (NASDAQ:ACET) engages in sourcing, marketing, selling, and distributing pharmaceutical intermediates and active ingredients, finished dosage form generics, nutraceutical products, agricultural protection products, and specialty chemicals.

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Insider selling by insider (last 30 days)

  • Ronald Gold sold 80,000 shares on May 15-24 and currently holds 730,500 shares or 2.7% of the company. Ronald Gold has been President and CEO of Rising Pharmaceuticals since March 1999.
  • Frank DeBenedittis sold 16,167 shares on May 21-22 and currently holds 54,214 shares or 0.2% of the company. Frank DeBenedittis has served as Senior Vice President, Corporate Business Development since August 2011 and International Senior Vice President, Active Pharmaceutical Ingredients since February 2011.
  • Guillaume Saint-Clair sold 2,250 shares on May 17 and currently holds 6,755 shares or less than 0.1% of the company. Guillaume Saint-Clair is International Vice President, Pharma Intermediate.
  • Douglas Roth sold 20,200 shares on May 17 and currently holds 55,908 shares or 0.2% of the company. Douglas Roth has been Senior Vice President and Chief Financial Officer of Aceto since March 2010.
  • Roger Weaving sold 5,600 shares on May 14 and currently holds 37,943 shares or 0.1% of the company. Roger Weaving is Senior Vice President, Specialty Chemicals.
  • David Rosen sold 40,000 shares on May 14 and currently holds 166,500 shares or 0.6% of the company. David Rosen is Senior Vice President, Rising Pharma.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 2013164,2170
April 201300
March 201300
February 201353,6250
January 201300

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

Financials

The company reported the fiscal 2013 third quarter financial results on May 9 with the following highlights:

Revenue$150.9 million
Net income$7.6 million
Cash$37.1 million
Debt$43.9 million

Outlook

Sal Guccione, Chief Executive Officer of Aceto, commented on May 9:

"We are pleased with the quarter's performance, but do not expect a repeat in the fiscal 2013 fourth quarter. Our current expectations are for a quarter much more in line with recent historical performance, with our usual caveat that results could vary on a quarterly basis due to the nature of our business and timing of our orders."

Competition

Aceto's competitors include American Vanguard Corp. (NYSE:AVD). Here is a table comparing these two companies.

CompanyACETAVDIndustry Average (Chemicals - Major Diversified)
Market Cap:331.46M872.28M16.22B
Employees:23350421.20K
Qtrly Rev Growth (yoy):0.240.390.16
Revenue:487.52M400.47M17.44B
Gross Margin:0.190.440.26
EBITDA:42.27M87.87M2.52B
Operating Margin:0.070.180.10
Net Income:20.91M45.05MN/A
EPS:0.761.563.31
P/E:15.9019.8214.51
PEG (5 yr expected):0.620.531.35
P/S:0.672.170.84

Aceto's P/S ratio is below the industry average.

My analysis

There have been six different insiders selling the shares and there have not been any insiders buying the shares during the past 30 days. The company has an insider ownership of 4.53%. The stock is trading at a P/E ratio of 15.90 and a forward P/E ratio of 11.86. The company has a book value of $6.76 per share and the stock has a dividend yield of 1.85%. 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 the weak guidance and the intensive insider selling activity.

3. Broadridge Financial Solutions (NYSE:BR) provides technology solutions to the financial services industry in the United States, Canada, and the United Kingdom.

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Insider selling by insider (last 30 days)

  • Robert Schifellite sold 17,775 shares on May 23 and currently holds 50,860 shares or less than 0.1% of the company. Robert Schifellite is Corporate Senior Vice President, Investor Communication Solutions.
  • Douglas DeSchutter sold 6,025 shares on May 17 and currently holds 40,143 shares or less than 0.1% of the company. Douglas DeSchutter is Corporate Vice President, U.S. Regulatory and Digital Communications.
  • Richard Daly sold 51,825 shares on May 15 pursuant to a 10b5-1 plan. Richard Daly currently holds 149,100 shares or 0.1% of the company. Richard Daly is the Chief Executive Officer and has been a member of the Board of Directors since 2007.
  • Joseph Barra sold 419,644 shares on May 9-13 and currently holds 53,365 shares or less than 0.1% of the company. Joseph Barra is Corporate Vice President, SPS International and Global Outsourcing Solutions.
  • John Benzie sold 49,960 shares on May 9-10 and currently holds 9,231 shares or less than 0.1% of the company. John Benzie is Corporate Vice President, Sales.
  • Dan Sheldon sold 51,000 shares on May 10 and currently holds 73,743 shares or less than 0.1% of the company. Dan Sheldon is Corporate Vice President and Chief Financial Officer.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 2013596,2290
April 201315,0000
March 201327,5970
February 201317,8250
January 201300

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

Financials

The company reported the fiscal 2013 third quarter, which ended March 31, financial results on May 7 with the following highlights:

Revenue$576.7 million
Net income$43.4 million
Cash$182.2 million
Debt$524.5 million

Outlook

The company reaffirmed its full fiscal year guidance on May 7. Broadridge anticipates recurring revenue growth in the range of 4% to 7% and total revenue growth in the range of 3% to 4%, GAAP earnings from continuing operations before income taxes margins in the range of 13.8% to 14.4%, and Non-GAAP earnings from continuing operations before income taxes margins in the range of 15.1% to 15.7%.

Broadridge anticipates GAAP diluted earnings per share from continuing operations in the range of $1.60 to $1.70, and Non-GAAP diluted earnings per share from continuing operations in the range of $1.76 to $1.86, based on diluted weighted-average shares outstanding of approximately 128 million shares. Broadridge's free cash flow is expected to be in the range of approximately $200 million to $250 million. Broadridge's recurring revenue closed sales are expected to be in the range of $110 million to $150 million.

Competition

Broadridge's competitors include The Bank of New York Mellon Corporation (NYSE:BK). Here is a table comparing these two companies.

CompanyBRBKIndustry Average (Information & Delivery Services)
Market Cap:3.39B34.92B13.51B
Employees:6,20049,70035.00K
Qtrly Rev Growth (yoy):0.05-0.000.00
Revenue:2.37B14.63B5.65B
Gross Margin:0.27N/A0.59
EBITDA:364.90MN/A1.56B
Operating Margin:0.110.280.15
Net Income:160.90M1.51BN/A
EPS:1.271.290.78
P/E:21.9523.4046.48
PEG (5 yr expected):1.431.061.11
P/S:1.432.392.39

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

My analysis

There have been six different insiders selling the shares and there have not been any insiders buying the shares during the past 30 days. The company has an insider ownership of 0.53%. There are two analyst buy ratings, three neutral ratings and zero sell ratings with an average target price of $26.25. The stock is trading at a P/E ratio of 21.95 and a forward P/E ratio of 13.78. The company has a book value of $6.40 per share and the stock has a dividend yield of 2.57%. 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.

Source: 1 Tech, 1 Basic Materials And 1 Services Company With Recent Intensive Insider Selling