In this article, I will feature one sporting goods 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%.
Dick's Sporting Goods (DKS) operates as a sports and fitness retailer primarily in the Eastern United States.
Insider selling during the last 30 days
Here is a table of Dick's Sporting Goods' insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|John Duken||EVP||Sep 23||99,000||No||119,481 shares||45.3%|
|Joe Oliver||SVP||Sep 20-24||46,761||No||63,060 shares + 4,489 options||40.9%|
|Joe Schmidt||COO||Sep 20-24||75,000||No||91,394 shares||45.1%|
|Michele Willoughby||EVP||Sep 24||10,125||No||56,064 shares + 5,625 options||14.1%|
|David Mossé||SVP||Sep 20||6,000||No||36,084 shares||14.3%|
There have been 236,886 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 Dick's Sporting Goods' insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 681,423 shares sold and there have been 7,400 shares purchased by insiders this year.
Dick's Sporting Goods reported the second-quarter, which ended August 3, financial results on August 20 with the following highlights:
|Net income||$84.2 million|
On August 20, Dick's Sporting Goods revised its full year guidance to a range of $2.60 to $2.65 per share, primarily due to lower sales expectations for the second half of the year, which are a result of the company's belief that consumers will remain relatively cautious.
Dick's Sporting Goods has the second-highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only Dick's Sporting Goods has seen intensive insider selling during the past 30 days.
There have been five different insiders selling Dick's Sporting Goods and there have not been any insiders buying Dick's Sporting Goods during the past 30 days. All five of these insiders decreased their holdings by more than 10%. Dick's Sporting Goods has an insider ownership of 0.40%.
Dick's Sporting Goods is trading at a P/E ratio of 20.15 and a forward P/E ratio of 16.99. The company has a book value of $13.54 per share and the stock has a dividend yield of 0.95%.
Before entering short Dick's Sporting Goods, 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.