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In this article, I will feature one services sector 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%.

FleetCor Technologies (NYSE:FLT) provides fuel cards and workforce payment products and services to businesses, commercial fleets, oil companies, petroleum marketers, and government entities in North America, Latin America, and Europe.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of FleetCor Technologies' insider-trading activity during the last 30 days by insider.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Todd HouseCOOSep 26-Oct 1520,000Yes10,000 shares66.6%
Andrew BlazyeCEOSep 27-Oct 168,922Yes26,250 shares + 106,168 options6.3%
Jeffrey LambEVPOct 125,000Yes5,100 shares + 182,500 options11.8%

There have been 53,922 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 FleetCor's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
October 201339,4610
September 20132,804,4610
August 201382,6530
July 201339,4620
June 201358,0690
May 20134,371,2110
April 201353,3670
March 20134,539,9740
February 2013153,8330
January 201322,3470

There have been 12,164,838 shares sold and there have been zero shares purchased by insiders this year.

Financials

FleetCor reported the second-quarter financial results on August 1 with the following highlights:

Revenue$220.9 million
Net income$73.1 million
Cash$292.9 million
Debt$1.0 billion

Outlook

On August 1, FleetCor raised its financial guidance for 2013 as follows:

  • Revenues, net between $825 million and $835 million, up from previous guidance range of $810 million to $820 million.
  • Adjusted net income between $322 million and $327 million, up from previous guidance range of $310 million to $320 million.
  • Adjusted net income per diluted share between $3.82 and $3.87, up from previous guidance range of $3.70 to $3.80.

Competition

FleetCor's competitors include U.S. Bancorp (NYSE:USB) and WEX Inc. (NYSE:WEX). Here is a table comparing these companies.

CompanyFLTUSBWEXIndustry Average (Business Services)
Market Cap:9.19B69.73B3.41B260.83M
Employees:2,65064,4861,302769.00
Qtrly Rev Growth (yoy):0.280.010.170.15
Revenue:804.07M17.53B673.62M196.60M
Gross Margin:0.77N/A0.560.37
EBITDA:438.27MN/A276.21M22.07M
Operating Margin:0.490.460.360.06
Net Income:257.48M5.51B114.25MN/A
EPS:3.032.972.920.07
P/E:37.1212.8130.0222.46
PEG (5 yr expected):1.811.751.481.48
P/S:11.433.985.061.88

FleetCor has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

CompanyInsider buying / sharesInsider selling / shares
USB02,061,379
WEX0133,903

Only FleetCor has seen intensive insider selling during the past 30 days.

Conclusion

There have been three different insiders selling FleetCor and there have not been any insiders buying FleetCor during the past 30 days. Two of these three insiders decreased their holdings by more than 10%. FleetCor has an insider ownership of 0.70%.

FleetCor is trading at a P/E ratio of 37.12 and a forward P/E ratio of 24.23. The company has a book value of $12.87 per share.

FleetCor has a $84 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $84 price target. I would place a stop loss at $114, which is the all-time high. The three main reasons for the proposed short entry are bearish Point and Figure chart, high P/S ratio, and the intensive insider selling activity.

Source: Insiders Are Selling FleetCor Technologies