Pfizer: 3 Different Insiders Have Sold Shares During The Last 30 Days

Nov.25.13 | About: Pfizer Inc. (PFE)

In this article, I will feature one healthcare 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%.

Pfizer (NYSE:PFE) is a research-based, global biopharmaceutical company.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Anthony Maddaluna EVP Nov 1-14 135,500 No 147,753 shares 47.8%
Loretta Cangialosi SVP Nov 1 10,000 No 192,721 shares 4.9%
Ian Read CEO Oct 28 338,000 Yes

1,144,979 shares

22.8%
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There have been 483,500 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 Pfizer's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
November 2013 145,500 0
October 2013 338,000 0
September 2013 99,361 0
August 2013 0 0
July 2013 111,188 0
June 2013 0 0
May 2013 239,900 0
April 2013 0 0
March 2013 307,667 0
February 2013 0 0
January 2013 26,752 0
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There have been 1,268,368 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling.

Financials

Pfizer reported the third-quarter financial results on October 29 with the following highlights:

Revenue $12.6 billion
Net income $2.6 billion
Cash $33.7 billion
Debt $36.6 billion
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(Source: Earnings presentation)

Outlook

Pfizer's guidance for the full-year 2013 is as follows:

Adjusted Revenues $50.8-$51.8 billion
Adjusted EPS $2.15-$2.20
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(Source: Earnings presentation)

Upcoming milestones

Pfizer's upcoming milestones include the following:

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(Source: Earnings presentation)

Competition

Pfizer's competitors include Merck (NYSE:MRK), Novartis (NYSE:NVS), and Sanofi (NYSE:SNY). Here is a table comparing these companies.

Company PFE MRK NVS SNY
Market Cap: 208.17B 143.00B 194.11B 140.52B
Employees: 91,500 83,000 133,000 111,974
Qtrly Rev Growth (yoy): -0.02 -0.04 0.04 -0.07
Revenue: 56.25B 44.45B 58.48B 43.27B
Gross Margin: 0.81 0.64 0.67 0.67
EBITDA: 24.62B 15.36B 17.19B 13.40B
Operating Margin: 0.32 0.20 0.21 0.18
Net Income: 10.68B 4.53B 9.37B 4.05B
EPS: 3.62 1.49 3.79 1.52
P/E: 8.87 32.89 21.03 34.84
PEG (5 yr expected): 4.98 6.00 3.60 3.17
P/S: 3.70 3.22 3.32 3.25
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Pfizer has the highest P/S ratio among these four companies. In Merck, there have been 431,484 shares sold and there have been zero shares purchased by insiders this year. Only Pfizer has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Pfizer and there have not been any insiders buying Pfizer during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Pfizer has an insider ownership of 0.02%.

Pfizer is trading at a P/E ratio of 8.87 and a forward P/E ratio of 14.02. The company has a book value of $11.84 per share and the stock has a dividend yield of 2.99%.

Before entering short Pfizer, 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.

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.