In this article, I will feature one medical device company 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%.
St. Jude Medical (NYSE:STJ) develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide.
Insider selling during the last 30 days
Here is a table of St. Jude Medical'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|
|Michael Rousseau||Group President||Oct 3-4||171,000||Yes||20,382 shares||89.4%|
|Denis Gestin||President||Oct 3-4||137,000||Yes||6,257 shares||95.6%|
|Donald Zurbay||CFO||Oct 4||12,000||Yes||9,731 shares||56.7%|
There have been 320,000 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 St. Jude Medical's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 770,965 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling.
St. Jude Medical reported the second-quarter financial results on July 17, with the following highlights:
|Net income||$115 million|
As of July 17, St. Jude Medical expects its consolidated net earnings for the third quarter of 2013 to be in the range of $0.88 to $0.90 per share and for full-year 2013 consolidated net earnings to be in the range of $3.70 to $3.73, increasing the lower end of the range by $0.02.
St. Jude Medical's P/S ratio is above the industry average.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only St. Jude Medical has seen intensive insider selling during the past 30 days.
There have been three different insiders selling St. Jude Medical and there have not been any insiders buying St. Jude Medical during the past 30 days. All three of these insiders decreased their holdings by more than 10%. St. Jude Medical has an insider ownership of 0.10%.
There are 11 analyst buy ratings, nine neutral ratings, and four sell ratings with an average price target of $53.72. St. Jude Medical is trading at a P/E ratio of 26.06 and a forward P/E ratio of 13.90. The company has a book value of $13.52 per share and the stock has a dividend yield of 1.81%.
Before entering short St. Jude Medical, 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 price targets and the intensive insider selling activity.