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There was intensive insider selling in MedAssets (MDAS) in March when the stock was trading above $19. The stock is currently trading at $16.48, or 16.3% below the peak made in March.

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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. Cubist Pharmaceuticals (CBST), a bio-pharmaceutical company, focuses on the research, development, and commercialization of pharmaceutical products for various medical needs in the acute care environment in the United States.

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Insider selling by insider (last 30 days)

  • Mark Corrigan sold 14,000 shares on May 24, pursuant to a Rule 10(b)5-1 Plan. Mark Corrigan currently holds 3,156 shares or less than 0.1% of the company. Mark Corrigan serves as a director of the company.
  • Matthew Singleton sold 27,500 shares on May 22, and currently holds 3,625 shares or less than 0.1% of the company. Matthew Singleton serves as a director of the company.
  • Gregory Stea sold 5,554 shares on May 14-20, pursuant to a Rule 10(b)5-1 Plan. Gregory Stea currently holds 14,189 shares or less than 0.1% of the company. Gregory Stea has served as Senior Vice President, Commercial Operations since February 2009.
  • Robert Perez sold 20,336 shares on May 14-20, pursuant to a Rule 10(b)5-1 Plan. Robert Perez currently holds 35,945 shares or less than 0.1% of the company. Robert Perez has served as President and Chief Operating Officer since July 2012.
  • Michael Bonney sold 69,132 shares on May 14-20, pursuant to a Rule 10(b)5-1 Plan. Michael Bonney currently holds 161,518 shares or 0.2% of the company. Michael Bonney has served as Chief Executive Officer and as a member of the Board of Directors since June 2003.
  • Charles Laranjeira sold 14,000 shares on May 20, pursuant to a Rule 10(b)5-1 Plan. Charles Laranjeira currently holds 61,000 options or 0.1% of the company. Charles Laranjeira has served as Cubist's Senior Vice President of Technical Operations since June 2011.
  • Steven Gilman sold 3,353 shares on May 14-16, pursuant to a Rule 10(b)5-1 Plan. Steven Gilman currently holds 23,507 shares or less than 0.1% of the company. Steven Gilman has served as Executive Vice President, Research & Development and Chief Scientific Officer since September 2010.
  • Kenneth Bate sold 2,500 shares on May 15, pursuant to a Rule 10(b)5-1 Plan. Kenneth Bate currently holds 5,839 shares or less than 0.1% of the company. Kenneth Bate serves as a director of the company.
  • Michael Tomsicek sold 488 shares on May 14, and currently holds 4,500 options or less than 0.1% of the company. Michael Tomsicek has served as Senior Vice President & CFO since March 2013.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 2013156,8630
April 201320,0000
March 201318,1250
February 201310,0300
January 2013125,4520

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

Financials

The company reported the first-quarter financial results on April 18, with the following highlights:

Revenue$229.9 million
Net income$6.1 million
Cash$940.7 million
Debt$404.7 million

Outlook

The company's full-year 2013 guidance is as follows:

Revenue$1-1.045 billion
Operating income [GAAP]$150-$165 million
Adjusted operating income (non-GAAP)$230-$250 million
Cash (12/31/13)$1.1 billion
Debt (12/31/13)$450 million

Upcoming milestones

The company has the following upcoming milestones:

DrugAction Date
Ceftolozane/tazobactam~Mid-year 2013: Initiate Phase 3 VABP registration trial and open-label trial
Ceftolozane/tazobactam2H 2013: Report top-line results from Phase 3 trials in cUTI and cIAI
Bevenopran1H 2013: Initiate three Phase 3 efficacy trials in OIC
CB-6251H 2013: Go/No-Go decision on proceeding to Phase 2
EnteregYE 2013: FDA action on sNDA seeking label expansion (PDUFA Date October 21, 2013)

Competition

Cubicin

Competition in the market for therapeutic products that address serious Gram-positive bacterial infections is intense. Cubicin faces competition in the U.S. from other commercially-available drugs such as: vancomycin, marketed generically by Abbott Laboratories (ABT), Shionogi & Co., Ltd. (GM:SGIOF) and others; Zyvox, marketed by Pfizer (PFE); Synercid, marketed by King Pharmaceuticals, which is now a wholly-owned subsidiary of Pfizer; Tygacil, marketed by Wyeth Pharmaceuticals, which is also a wholly-owned subsidiary of Pfizer; Vibativ (telavancin), which is being marketed in the U.S. by Theravance (THRX); and Teflaro, which was launched by Forest Laboratories (FRX) in January 2011. In particular, vancomycin has been a widely-used and well-known antibiotic for more than 50 years and is sold in a relatively inexpensive generic form. Vancomycin sales account for 70% of sales in this market, based on days of therapy.

Entereg

Currently, Entereg is the only FDA-approved product indicated for the acceleration of GI recovery following bowel resection surgery. There are other products in various stages of clinical development for this condition. For example, Cubist is aware of molecules in development by Helsinn Therapeutics and other companies that could compete with Entereg at some point in the future.

Dificid

Dificid faces competition in the U.S. from other commercially available drugs for the treatment of CDAD, such as Vancocin (oral vancomycin), marketed by ViroPharma (VPHM), which is also available in an inexpensive generic form, as well as Flagyl (metronidazole), marketed by Pfizer and Sanofi-Aventis (SNY), which is also available in an inexpensive generic form.

My analysis

There have been nine 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 0.41%. The stock is trading at a P/E ratio of 32.36 and a forward P/E ratio of 30.93. The company has a book value of $15.68 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. Stanley Black & Decker (SWK) provides power and hand tools, mechanical access solutions, and electronic security and monitoring systems for various industrial applications primarily in the United States, Canada, Europe, and Asia.

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Insider selling by insider (last 30 days)

  • Jaime Ramirez sold 21,038 shares on May 1-28, and currently holds 18,307 shares or less than 0.1% of the company. Jaime Ramirez is Senior Vice President & President Global Emerging Markets.
  • Jeffrey Ansell sold 1,736 shares on May 22, pursuant to a rule 10b5-1 plan. Jeffrey Ansell currently holds 89,903 shares or less than 0.1% of the company. Jeffrey Ansell is Senior Vice President & Group Executive Construction & DIY.
  • Craig Douglas sold 7,163 shares on May 8-22, and currently holds 41,824 shares or less than 0.1% of the company. Craig Douglas is Vice President & Treasurer.
  • William Taylor sold 12,250 shares on May 14-21, and currently holds 20,481 shares or less than 0.1% of the company. William Taylor is President Fastening & Accessories.
  • Brett Bontrager sold 22,088 shares on May 15, and currently holds 70,186 shares or less than 0.1% of the company. Brett Bontrager is Senior Vice President & Group Executive Stanley Security, Americas & Asia.
  • Michael Tyll sold 42,935 shares on May 15, and currently holds 50,909 shares or less than 0.1% of the company. Michael Tyll is President, Engineered Fastening.
  • Michael Bartone sold 18,125 shares on May 7, and currently holds 39,527 shares or less than 0.1% of the company. Michael Bartone is Vice President, Corporate Tax.
  • Ben Sihota sold 10,000 shares on May 7, and currently holds 14,213 shares or less than 0.1% of the company. Ben Sihota is President, Emerging Markets Group.

Insider selling by calendar month

Here is a table of Stanley Black & Decker's insider trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
May 2013135,3350
April 201300
March 2013174,2860
February 2013478,8340
January 201357,2840

There have been 845,739 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$2.5 billion
Net income$81.1 million
Cash$557.5 million
Debt$4.8 billion

Outlook

The company's guidance is as follows:

  • Organic net sales to increase 2-3% from 2012.
  • GAAP EPS to approximate $4.46 to $4.71 in 2013.

Competition

Stanley's competitors include Danaher Corp. (DHR) and Makita Corporation (OTCPK:MKTAY). Here is a table comparing these companies.

CompanySWKDHRMKTAY
Market Cap:13.09B43.09B7.53B
Employees:45,32763,00012,680
Qtrly Rev Growth (yoy):0.030.030.16
Revenue:10.25B18.39B3.93B
Gross Margin:0.370.520.37
EBITDA:1.61B4.08B672.30M
Operating Margin:0.110.180.15
Net Income:424.10M2.47B394.88M
EPS:5.133.482.91
P/E:15.7517.8819.06
PEG (5 yr expected):1.111.63N/A
P/S:1.282.341.91

Stanley's P/S ratio is below its direct competitor's.

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 1.50%. The stock is trading at a P/E ratio of 15.75 and a forward P/E ratio of 12.85. The company has a book value of $41.27 per share and the stock has a dividend yield of 2.42%. 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. Analog Devices (ADI) engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits [ICs] for use in industrial, automotive, consumer, and communication markets worldwide.

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Insider selling by insider (last 30 days)

  • William Matson sold 39,000 shares on May 30, and currently holds 12,630 shares or less than 0.1% of the company. William Matson joined Analog Devices as the head of Human Resources in November 2006.
  • Robert McAdam sold 278 shares on May 29, and currently holds 192,757 shares or less than 0.1% of the company. Robert McAdam is Executive Vice President of the Strategic Business Segments Group.
  • John Hodgson sold 2,500 shares on May 24, and currently holds 7,715 shares or less than 0.1% of the company. John Hodgson serves as a director of the company.
  • David Zinsner sold 5,000 shares on May 1, pursuant to a 10b5-1 trading plan. David Zinsner currently holds 96,400 options or less than 0.1% of the company. David Zinsner is Vice President, Finance and Chief Financial Officer of Analog Devices.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
May 201346,7780
April 20138,7150
March 2013105,4420
February 201360,7820
January 201399,8830

There have been 321,600 shares sold and zero shares purchased this year.

Financials

The company reported the fiscal 2013 second quarter, which ended May 4, financial results on May 21, with the following highlights:

Revenue$659.3 million
Net income$164.5 million
Cash$4.2 billion
Debt$757.9 million

Outlook

The company's guidance for the fiscal 2013 third quarter is as follows:

  • Revenue estimated to be in the range of $655 to $685 million.
  • Gross margin estimated to be approximately 64.5%.
  • Operating expenses estimated to be approximately $226 million.
  • Tax rate estimated to be approximately 16.5%.
  • Diluted EPS estimated at $0.51 to $0.56.

Competition

Analog Devices' competitors include NXP Semiconductors (NXPI), STMicroelectronics (STM) and Texas Instruments (TXN). Here is a table comparing these companies.

CompanyADINXPISTMTXNIndustry Average (Semiconductor - Integrated Circuits)
Market Cap:14.10B7.83B8.31B40.07B151.18M
Employees:9,20025,31548,46034,1518.44K
Qtrly Rev Growth (yoy):-0.020.11-0.00-0.080.25
Revenue:2.66B4.46B8.48B12.59B969.13M
Gross Margin:0.640.460.320.490.42
EBITDA:902.91M1.07B411.00M3.88B-26.89M
Operating Margin:0.300.12-0.070.21-0.05
Net Income:644.65M-105.00M-1.15B1.82BN/A
EPS:2.09-0.42-1.301.62-0.93
P/E:21.95N/AN/A22.3825.87
PEG (5 yr expected):2.010.36-188.402.78N/A
P/S:5.361.760.993.211.33

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

My analysis

There have been four 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 0.49%. The stock is trading at a P/E ratio of 21.95 and a forward P/E ratio of 18.06. The company has a book value of $14.13 per share and the stock has a dividend yield of 2.94%. 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.

Source: 1 Tech, 1 Healthcare And 1 Industrial Goods Company With Recent Intensive Insider Selling