Insiders Are Selling Ford

Aug.13.13 | About: Ford Motor (F)

The consumer goods sector has been the third-worst performing group year to date with a gain of 14.8%.

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In this article, I will feature one consumer goods company that has seen intensive insider selling during the last 30 days. 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%.

Ford Motor Company (NYSE:F) engages in the development, manufacture, distribution, and service of vehicles, parts, and accessories worldwide.

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Insider selling by insider (last 30 days)

  • J Mays sold 104,364 shares on August 8, and currently controls 162,421 shares and 51,022 options or less than 0.1% of the company. J Mays is Group Vice President, Design and Chief Creative Officer, Design.
  • William Clay Ford sold 3,030,684 shares on August 5, and currently controls 2,040,542 shares and 26,849 options or less than 0.1% of the company. William Clay Ford is Executive Chairman.
  • Stuart Rowley sold 28,752 shares on August 2, and currently holds 26,323 shares and 23,219 options or less than 0.1% of the company. Stuart Rowley is Vice President and Controller.
  • Ziad Ojakli sold 61,194 shares on August 2, and currently holds 277,754 shares or less than 0.1% of the company. Ziad Ojakli is Group Vice President, Government and Community Relations.
  • Stephen Odell sold 196,399 shares on August 2, and currently holds 160,678 shares or less than 0.1% of the company. Stephen Odell is Executive Vice President and President, Europe, Middle East and Africa.
  • Joseph Hinrichs sold 201,408 shares on August 2, and currently holds 289,263 shares and 215,399 options or less than 0.1% of the company. Joseph Hinrichs is Executive Vice President and President, The Americas.
  • John Fleming sold 241,097 shares on August 2, and currently holds 611,913 shares or less than 0.1% of the company. John Fleming is Executive Vice President, Global Manufacturing and Labor Affairs.
  • Raymond Day sold 10,000 shares on August 2, and currently holds 13,000 shares or less than 0.1% of the company. Raymond Day is Group Vice President, Communications.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
August 2013 3,873,898 0
July 2013 0 0
June 2013 250,000 0
May 2013 233,201 0
April 2013 0 0
March 2013 337,123 0
February 2013 296,893 0
January 2013 0 0
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There have been 4,991,115 shares sold and there have been zero shares purchased by the insiders this year.

Financials

The company reported the second-quarter financial results on July 24, with the following highlights:

Revenue $38.1 billion
Net income $1.2 billion
Net cash $9.9 billion
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Outlook

Ford expects total company pre-tax profit to be equal to or higher than 2012, Automotive operating margin to be about equal to 2012 and Automotive operating-related cash flow to be substantially higher than 2012.

Competition

Ford's competitors include General Motors Company (NYSE:GM) and Toyota Motor Corporation (NYSE:TM). Here is a table comparing these companies.

Company F GM TM Industry Average (Auto Manufacturers - Major)
Market Cap: 66.96B 49.47B 205.17B 28.64B
Employees: 171,000 213,000 337,685 106.87K
Qtrly Rev Growth (yoy): 0.15 0.04 0.14 0.13
Revenue: 142.50B 152.84B 289.95B 76.45B
Gross Margin: 0.14 0.09 0.17 0.19
EBITDA: 11.99B 7.90B 36.35B 7.23B
Operating Margin: 0.05 0.01 0.08 0.07
Net Income: 6.07B 4.53B 15.68B N/A
EPS: 1.52 2.79 9.90 2.77
P/E: 11.21 12.78 13.06 13.31
PEG (5 yr expected): 0.81 0.61 0.41 0.81
P/S: 0.47 0.33 0.70 0.53
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Ford's P/S ratio is below the industry average. General Motors has seen six insider sell transactions and two insider buy transactions this year.

Conclusion

There have been eight different insiders selling Ford and there have not been any insiders buying Ford during the past 30 days. All eight of these insiders decreased their holdings by more than 10%. Ford has an insider ownership of 0.30%. The stock is trading at a P/E ratio of 11.21 and a forward P/E ratio of 9.74. Ford has a book value of $4.88 per share and the stock has a dividend yield of 2.34%. 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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.