Insiders Are Selling DexCom: 8 Different Insiders Have Sold Shares During The Last 30 Days

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 |  About: DexCom, Inc. (DXCM)
by: Markus Aarnio

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:

  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%.

DexCom (NASDAQ:DXCM) focuses on the design, development, and commercialization of continuous glucose monitoring systems.

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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

4.7%
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%
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(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
December 2013 140,809 0
November 2013 197,322 0
October 2013 9,000 0
September 2013 9,000 0
August 2013 9,000 0
July 2013 9,000 0
June 2013 46,361 0
May 2013 60,272 0
April 2013 9,000 0
March 2013 58,070 70,000
February 2013 84,000 0
January 2013 9,000 0
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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.

Financials

DexCom reported the third-quarter financial results on November 6 with the following highlights:

Revenue $42.9 million
Net loss $6.0 million
Cash $47.6 million
Debt $7.0 million
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Outlook

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.

Competition

DexCom's competitors include Medtronic (NYSE:MDT). Here is a table comparing these two companies.

Company DXCM MDT
Market Cap: 2.49B 58.08B
Employees: 565 46,659
Qtrly Rev Growth (yoy): 0.86 0.02
Revenue: 141.60M 16.76B
Gross Margin: 0.59 0.75
EBITDA: -26.60M 5.69B
Operating Margin: -0.23 0.29
Net Income: -35.70M 3.81B
EPS: -0.51 3.74
P/E: N/A 15.54
PEG (5 yr expected): -2.25 2.25
P/S: 17.57 3.46
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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.

Conclusion

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.

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.