In this article, I will feature one tech stock 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%.
IHS Inc. (IHS) provides critical information and insight products and services. It offers its products and services in various areas, including energy and power; design and supply chain; defense, risk, and security; environment, health, and safety, and sustainability; country and industry forecasting; and commodities, pricing, and cost.
Insider selling during the last 30 days
Here is a table of IHS' insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Brian Sweeney||SVP||Oct 2-17||2,360||Yes||5,370 shares||30.5%|
|Stephanie Buscemi||SVP||Oct 10||1,000||No||5,784 shares||14.7%|
|Stephen Green||EVP||Oct 1||2,000||Yes||31,739 shares||5.9%|
There have been 5,360 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 IHS' insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 70,458 shares sold and there have been zero shares purchased by insiders since March 2013.
IHS reported the third-quarter, which ended August 31, financial results on September 19 with the following highlights:
|Net income||$23.4 million|
For the year ending November 30, 2013, IHS expects:
- Revenue in a range of $1.80 billion to $1.82 billion.
- Adjusted EBITDA in a range of $540 million to $560 million.
- Adjusted EPS in a range of $4.75 to $5.00 per diluted share.
Here is a table of these competitors' insider-trading activities during the last six months.
|Company||Insider buying / shares||Insider selling / shares|
Only IHS has seen intensive insider selling during the past 30 days.
There have been three different insiders selling IHS and there have not been any insiders buying IHS during the past 30 days. Two of these three insiders decreased their holdings by more than 10%. IHS has an insider ownership of 0.60%.
IHS is trading at a P/E ratio of 53.74 and a forward P/E ratio of 19.36. The company has a book value of $27.04 per share. Before entering short IHS, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are high P/E ratio and the intensive insider selling activity.