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In this article, I will feature one consumer goods stock 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%.

Tupperware Brands Corporation (NYSE:TUP) operates as a direct seller of various products across a range of brands and categories through an independent sales force worldwide.

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Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Michael PoteshmanCFONov 12,000Yes40,576 shares4.7%
Edward DavisVPOct 255,000No3,503 shares58.8%
Glenn DrakeGroup PresidentOct 2519,850No11,801 shares62.7%

There have been 26,850 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 Tupperware's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
November 20132,0000
October 201326,8500
September 20132,0000
August 201395,5640
July 20133,8020
June 201313,5320
May 201354,7060
April 201310,2000
March 201377,2460
February 2013241,9550
January 2013171,3500

There have been 699,205 shares sold and there have been zero shares purchased by insiders this year.

Financials

Tupperware reported the third-quarter financial results on October 23 with the following highlights:

Revenue$603.2 million
Net income$49.9 million
Cash$126.0 million
Debt$911.8 million

Outlook

Tupperware's guidance for the fourth quarter and full-year 2013 is as follows:

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Competition

Tupperware's competitors include Avon Products (NYSE:AVP), and Newell Rubbermaid (NYSE:NWL). Here is a table comparing these companies.

CompanyTUPAVPNWLIndustry Average (Packaging & Containers)
Market Cap:4.67B7.77B8.65B503.78M
Employees:13,00039,10018,3002.29K
Qtrly Rev Growth (yoy):0.02-0.09-0.030.08
Revenue:2.67B10.40B5.97B1.16B
Gross Margin:0.670.620.380.22
EBITDA:461.30M1.07B924.80M92.83M
Operating Margin:0.160.080.130.07
Net Income:259.00M-104.90M411.60MN/A
EPS:4.78-0.361.560.47
P/E:19.03N/A19.0617.92
PEG (5 yr expected):1.371.091.741.37
P/S:1.760.761.440.46

Tupperware 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
AVP13,00050,000
NWL0286,341

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

Conclusion

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

Tupperware is trading at a P/E ratio of 19.03 and a forward P/E ratio of 14.82. The company has a book value of $5.19 per share.

Before entering short Tupperware, 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.

Source: Insiders Are Selling Tupperware