In this article, I will feature one medical device company 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%.
DexCom (NASDAQ:DXCM) focuses on the design, development, and commercialization of continuous glucose monitoring systems.
Insider selling during the last 30 days
Here is a table of DexCom'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|
|Nicholas Augustinos||Director||Dec 9-10||97,541||No||22,451 shares||81.3%|
|Terrance Gregg||CEO||Nov 13-Dec 5||64,000||No||957,163 shares + 1,621,890 options||2.4%|
|Barbara Kahn||Director||Nov 22||1,500||No||49,263 shares||3.0%|
|Andrew Balo||SVP||Nov 11-Dec 3||56,490||No||124,297 shares + 477,000 options||8.6%|
|Steven Pacelli||EVP||Nov 14-19||35,000||No|
195,865 shares + 512,000 options
|John Lister||VP||Nov 13||30,000||No||71,326 shares + 133,700 options||12.8%|
|Jess Roper||CFO||Nov 11-12||18,000||No||65,808 shares + 215,500 options||6.0%|
|Jorge Valdes||CTO||Nov 12||26,600||No||144,853 shares + 632,000 options||3.3%|
(Note: This table has been updated on December 12)
There have been 329,131 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 DexCom's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 640,834 shares sold and there have been 70,000 shares purchased by insiders this year. The month of November has seen the most insider selling.
DexCom reported the third-quarter financial results on November 6 with the following highlights:
|Net loss||$6.0 million|
Kevin Sayer, President and Chief Operating Officer of DexCom, commented at the earnings conference call:
While we are not formally adjusting our full-year guidance at this time, we are confident that we'll exceed the top end of our current range of $140 million in product revenue.
Pipeline and upcoming milestones
DexCom is developing and marketing continuous glucose monitoring systems for ambulatory use by people with diabetes and by healthcare providers in the hospital.
DexCom has three pending FDA filings with upcoming approval decisions.
DexCom's competitors include Medtronic (NYSE:MDT). Here is a table comparing these two companies.
DexCom is trading at a higher P/S ratio than Medtronic. In Medtronic, there have been 298,847 shares sold and there have been 4,800 shares purchased by insiders this year. Only DexCom has seen intensive insider selling during the last 30 days.
There have been eight different insiders selling DexCom and there have not been any insiders buying DexCom during the last 30 days. Two of these eight insiders decreased their holdings by more than 10%. DexCom has an insider ownership of 2.00%.
Before entering short DexCom, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are negative earnings, relatively high P/S ratio, and the intensive insider-selling activity.