In this article, I will feature one apparel store that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
Nordstrom (JWN), a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States.
Insider selling during the last 30 days
Here is a table of Nordstrom's insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Tricia Smith||EVP||Oct 1||6,439||Yes||2,599 shares + 7,240 options||39.6%|
|Margaret Myers||EVP||Sep 18||8,670||No||23,608 shares||26.9%|
|Delena Sunday||EVP||Sep 16||30,576||Yes||40,262 shares + 14,215 options||35.9%|
There have been 45,685 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.
Insider selling by calendar month
Here is a table of Nordstrom's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 441,008 shares sold and there have been zero shares purchased by insiders this year.
Nordstrom reported the second-quarter financial results on August 15 with the following highlights:
|Net income||$184 million|
On August 15 Nordstrom reduced its full-year earnings per diluted share outlook to $3.60 to $3.70 compared to its prior outlook of $3.65 to $3.80. This reflects full-year same-store sales expectations of 2 to 3 percent compared to its prior outlook of 3 to 5 percent.
Nordstrom has the highest P/S ratio among these four companies, which could explain some of the insider selling.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only Nordstrom has seen intensive insider selling during the past 30 days.
There have been three different insiders selling Nordstrom and there have not been any insiders buying Nordstrom during the past 30 days. All three of these insiders decreased their holdings by more than 10%. Nordstrom has an insider ownership of 3.60%.
Nordstrom is trading at a P/E ratio of 15.01 and a forward P/E ratio of 13.79. Nordstrom has a book value of $10.39 per share and the stock has a dividend yield of 2.11%.
Nordstrom has a $48 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $48 price target. I would place a stop loss at $63, which is the all-time high. The two main reasons for the proposed short entry are bearish Point and Figure chart and the intensive insider selling activity.