2 Services Companies And 1 Consumer Goods Stock With Recent Intensive Insider Selling

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 |  Includes: CORE, JBHT, MNRO
by: Markus Aarnio

There was intensive insider selling in Palo Alto Networks (NYSE:PANW) in March, when the stock was trading above $55. The stock is currently trading at $45.85 or 26.3% 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. Monro Muffler Brake (NASDAQ:MNRO) provides automotive under car repair and tire services in the United States.

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Insider selling by insider (last 30 days)

  • Robert Gross sold 180,000 shares on May 30 - June 7, and currently holds 207,885 shares or 0.7% of the company. Robert Gross serves as a director of the company.
  • James Wilen sold 10,000 shares on June 3, and currently holds 2,277 shares or less than 0.1% of the company. James Wilen serves as a director of the company.
  • Donald Glickman sold 90,260 shares on May 23-31, and currently holds 226,383 shares or 0.7% of the company. Donald Glickman serves as a director of the company.
  • Craig Hoyle sold 2,255 shares on May 31, and currently holds 55,625 shares or 0.2% of the company. Craig Hoyle is Divisional Vice President.
  • Frederick Danziger sold 20,520 shares on May 24, and currently holds 65,307 shares or 0.2% of the company. Frederick Danziger serves as a director of the company.
  • Richard Berenson sold 2,808 shares on May 23, and currently holds 31,487 shares or 0.1% of the company. Richard Berenson serves as a director of the company.

Insider selling by calendar month

Here is a table of Monro Muffler Brake's insider trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2013 152,926 0
May 2013 152,917 0
April 2013 0 0
March 2013 0 0
February 2013 4,500 750
January 2013 0 0
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The month of June has seen the most insider selling this year.

Financials

The company reported the fiscal 2013 full year, which ended March 30, financial results on May 21, with the following highlights:

Revenue $732.0 million
Net income $42.6 million
Cash $1.5 million
Debt $186.7 million
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Outlook

  • The company anticipates fiscal 2014 sales to be between $840 million and $865 million. Comparable-store sales increases are expected to be in the range of 2.5% to 4.5%. Fiscal 2014 diluted earnings per share are expected to be in the range of $1.65 to $1.80, which compares to $1.32 diluted earnings per share in fiscal 2013. The estimate is based on 32.4 million weighted average shares outstanding.
  • For the first quarter of fiscal 2014, the company anticipates comparable-store sales increases to be in the range of 3% to 4%. The company expects diluted earnings per share for the first quarter to be between $0.42 and $0.46, as compared to $0.36 for the first quarter of fiscal 2013.

Competition

Monro Muffler Brake's competitors include Pep Boys - Manny, Moe & Jack (NYSE:PBY). Here is a table comparing these two companies.

Company MNRO PBY Industry Average (Auto Parts)
Market Cap: 1.50B 667.36M 7.36B
Employees: 5,850 13,886 7.31K
Qtrly Rev Growth (yoy): 0.14 0.05 0.09
Revenue: 732.00M 2.09B 4.04B
Gross Margin: 0.38 0.29 0.33
EBITDA: 101.21M 117.49M 280.32M
Operating Margin: 0.10 0.02 0.09
Net Income: 42.26M 13.15M N/A
EPS: 1.32 0.23 3.57
P/E: 36.35 53.63 10.34
PEG (5 yr expected): 1.56 1.52 3.84
P/S: 2.05 0.32 0.75
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Monro Muffler Brake is trading at above industry average P/S ratio, which could explain some of the insider selling.

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 4.85%. The stock is trading at a P/E ratio of 36.35 and a forward P/E ratio of 21.11. The company has a book value of $11.70 per share and the stock has a dividend yield of 0.92%. 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.

2. Core-Mark Holding Company (NASDAQ:CORE) markets fresh and broad-line supply solutions to the convenience retail industry in the United States and Canada.

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Insider selling by insider (last 30 days)

  • William Krause sold 4,852 shares on June 5-6, and currently holds 1,221 shares or less than 0.1% of the company. William Krause serves as a director of the company.
  • Stacy Loretz-Congdon sold 5,847 shares on May 31, and currently holds 40,900 shares or 0.4% of the company. Stacy Loretz-Congdon is Senior Vice President and Chief Financial Officer.
  • Scott McPherson sold 6,328 shares on May 17, and currently holds 44,920 shares or 0.4% of the company. Scott McPherson is Senior Vice President, Corporate Development.
  • Eric Rolheiser sold 2,775 shares on May 9, and currently holds 1,579 shares or less than 0.1% of the company. Eric Rolheiser is President, Canada Operations.
  • Christopher Miller sold 2,125 shares on May 10, and currently holds 1,181 shares or less than 0.1% of the company. Christopher Miller is Vice President, Chief Accounting Officer.

Insider selling by calendar month

Here is a table of Core-Mark's insider trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2013 4,852 0
May 2013 17,075 0
April 2013 16,246 0
March 2013 28,742 0
February 2013 18,000 0
January 2013 28,520 0
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There have been 113,435 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 $2.2 billion
Net income $2.6 million
Cash $18.6 million
Debt $35.3 million
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Outlook

The company expects annual net sales in 2013 to be between $9.8 billion and $10.0 billion, a 10% to 12% increase. Adjusted EBITDA for 2013 is expected to be between $112 million and $115 million, an 11% to 14% increase which includes some start-up and conversion costs associated with the recent acquisition. Diluted earnings per share for the full year are expected to be between $3.10 and $3.25.

Competition

Core-Mark estimates that, as of December 31, 2012, there were approximately 300 wholesale distributors serving traditional convenience retailers in the U.S. and Canada. Core-Mark believes McLane Company, a subsidiary of Berkshire Hathaway (NYSE:BRK.B), and Core-Mark are the two largest convenience wholesale distributors (measured by annual sales) in North America. There are two other large regional companies that provide products to specific areas of the country, H.T. Hackney Company in the Southeast and Eby-Brown Company in the Midwest and Mid-Atlantic regions. In addition there are several hundred local distributors serving small regional chains and independent convenience retailers. In Canada, there are two large regional players, aside from Core-Mark, that make up the competitive landscape, Karrys Bros., Limited and Wallace & Carey, Inc.

My analysis

There have been five 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 2.69%. The stock is trading at a P/E ratio of 21.69 and a forward P/E ratio of 13.41. The company has a book value of $34.87 per share and the stock has a dividend yield of 1.24%. 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. J.B. Hunt Transport Services (NASDAQ:JBHT) provides transportation and delivery services in the continental United States, Canada, and Mexico.

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Insider selling by insider (last 30 days)

  • Gary Anderson sold 3,600 shares on June 7, and currently holds 24,362 shares or less than 0.1% of the company. Gary Anderson is Executive Vice President, Maintenance, Properties and Equipment.
  • Kay Palmer sold 22,833 shares on June 7, and currently holds 73,542 shares or less than 0.1% of the company. Kay Palmer is Executive Vice President Chief Information Officer.
  • Terrence Matthews sold 8,000 shares on June 7, and currently holds 68,989 shares or less than 0.1% of the company. Terrence Matthews is President, Intermodal.
  • Alfred Harper sold 25,600 shares on June 6-7, and currently holds 66,018 shares or less than 0.1% of the company. Alfred Harper is Executive Vice President, Operations, Chief Operations Officer.
  • John Roberts sold 13,364 shares on June 5, and currently holds 231,988 shares or 0.2% of the company. John Roberts is President and Chief Executive Officer of the company.
  • James Thompson sold 65,164 shares on May 31 - June 6, and currently holds 75,740 shares or less than 0.1% of the company. James Thompson is Chairman of the Board.
  • David Mee sold 17,066 shares on June 4, and currently holds 90,530 shares or less than 0.1% of the company. David Mee is Executive Vice President Finance/Administration, Chief Financial Officer, Corporate Secretary.
  • David Chelette sold 2,400 shares on June 4, and currently holds 8,124 shares or less than 0.1% of the company. David Chelette is Treasurer and Senior Vice President.

Insider selling by calendar month

Here is a table of J.B. Hunt Transport Services' insider trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2013 152,863 0
May 2013 5,164 0
April 2013 2,000 0
March 2013 238,434 0
February 2013 147,926 3,750
January 2013 6,300 0
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There have been 552,687 shares sold and 3,750 shares purchased this year.

Financials

The company reported the first-quarter financial results on April 11, with the following highlights:

Revenue $1.3 billion
Net income $73.3 million
Cash $5.7 million
Debt $593.3 million
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Competition

J.B. Hunt Transport Services' competitors include Landstar System (NASDAQ:LSTR) and Swift Transportation Company (NYSE:SWFT). Here is a table comparing these companies.

Company JBHT LSTR SWFT
Market Cap: 8.64B 2.52B 2.44B
Employees: 16,475 1,369 17,600
Qtrly Rev Growth (yoy): 0.11 -0.03 0.04
Revenue: 5.18B 2.77B 3.52B
Gross Margin: 0.17 0.22 0.20
EBITDA: 772.42M 230.84M 533.00M
Operating Margin: 0.10 0.07 0.09
Net Income: 316.02M 129.71M 131.74M
EPS: 2.63 2.77 0.94
P/E: 27.85 19.52 18.53
PEG (5 yr expected): 1.42 1.21 0.91
P/S: 1.67 0.91 0.69
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J.B. Hunt Transport Services' P/S ratio is above its direct competitors'.

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 19.98%. The stock is trading at a P/E ratio of 27.85 and a forward P/E ratio of 20.84. The company has a book value of $7.44 per share and the stock has a dividend yield of 0.82%. 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.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in PANW over 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.