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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.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Anthony MaddalunaEVPNov 1-14135,500No147,753 shares47.8%
Loretta CangialosiSVPNov 110,000No192,721 shares4.9%
Ian ReadCEOOct 28338,000Yes

1,144,979 shares

22.8%

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.

MonthInsider selling / sharesInsider buying / shares
November 2013145,5000
October 2013338,0000
September 201399,3610
August 201300
July 2013111,1880
June 201300
May 2013239,9000
April 201300
March 2013307,6670
February 201300
January 201326,7520

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

(click to enlarge)

(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

(click to enlarge)

(Source: Earnings presentation)

Upcoming milestones

Pfizer's upcoming milestones include the following:

(click to enlarge)

(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.

CompanyPFEMRKNVSSNY
Market Cap:208.17B143.00B194.11B140.52B
Employees:91,50083,000133,000111,974
Qtrly Rev Growth (yoy):-0.02-0.040.04-0.07
Revenue:56.25B44.45B58.48B43.27B
Gross Margin:0.810.640.670.67
EBITDA:24.62B15.36B17.19B13.40B
Operating Margin:0.320.200.210.18
Net Income:10.68B4.53B9.37B4.05B
EPS:3.621.493.791.52
P/E:8.8732.8921.0334.84
PEG (5 yr expected):4.986.003.603.17
P/S:3.703.223.323.25

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.

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