Insiders Are Selling John Wiley & Sons

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 |  About: John Wiley & Sons, Inc. (JW.A), Includes: PSO
by: Markus Aarnio

In this article, I will feature one publishing 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%.

John Wiley & Sons (NYSE:JW.A) provides knowledge and knowledge-based services in areas of research, professional development, and education to customers worldwide.

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Insider selling during the last 30 days

Here is a table of John Wiley & Sons' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
William Pesce Director Oct 14-18 200,000 No 112,926 shares 63.9%
Stephen Smith CEO Oct 14 15,764 No 77,367 shares + 1,441 options 16.7%
Vincent Marzano VP Oct 1 578 No 660 shares 46.7%
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There have been 216,342 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 John Wiley & Sons' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
October 2013 216,342 0
September 2013 11,850 0
August 2013 0 0
July 2013 49,791 0
June 2013 93,611 0
May 2013 0 0
April 2013 0 0
March 2013 1,585 0
February 2013 0 0
January 2013 0 0
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There have been 373,179 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling this year.

Financials

John Wiley & Sons reported the fiscal 2014 first-quarter, which ended July 31, financial results on September 9 with the following highlights:

Revenue $411.0 million
Net income $35.9 million
Cash $189.8 million
Debt $660.0 million
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Outlook

John Wiley & Sons' guidance for fiscal year 2014 is low-single-digit adjusted revenue growth and adjusted EPS of $2.85 to $2.95.

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Competition

John Wiley & Sons' competitors include Pearson (NYSE:PSO). Here is a table comparing these two companies.

Company JW-A PSO
Market Cap: 2.95B 17.74B
Employees: 5,400 42,980
Qtrly Rev Growth (yoy): 0.00 0.05
Revenue: 1.76B 8.29B
Gross Margin: 0.70 0.56
EBITDA: 320.50M 1.41B
Operating Margin: 0.14 0.12
Net Income: 144.04M 425.95M
EPS: 2.40 0.56
P/E: 20.96 39.11
PEG (5 yr expected): 1.34 4.29
P/S: 1.65 2.14
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John Wiley & Sons' P/S ratio is below its direct competitors'.

Conclusion

There have been three different insiders selling John Wiley & Sons and there have not been any insiders buying John Wiley & Sons during the past 30 days. All three of these insiders decreased their holdings by more than 10%. John Wiley & Sons has an insider ownership of 1.00%.

John Wiley & Sons is trading at a P/E ratio of 20.96 and a forward P/E ratio of 14.42. The company has a book value of $17.05 per share and the stock has a dividend yield of 1.61%. Before entering short John Wiley & Sons, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.