In this article, I will feature one management services stock 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%.
FTI Consulting (FCN) operates as a business advisory firm enabling organizations to protect enterprise values in complex economic, legal, and regulatory, environments worldwide.
Insider selling during the last 30 days
Here is a table of FTI Consulting'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|
|Roger Carlile||CFO||Dec 18-20||82,141||No||91,227 shares + 38,568 options||38.8%|
|David Bannister||EVP||Dec 17-18||68,002||No||90,230 shares||43.0%|
|Jack Dunn||CEO||Dec 17-20||385,707||No||123,176 shares + 20,001 options||72.9%|
|Brenda Bacon||Director||Dec 17-19||22,000||No||26,785 shares||45.1%|
|Eric Miller||EVP||Dec 18||40,834||No||37,610 shares||52.1%|
|Catherine Freeman||SVP||Dec 18||21,381||No||8,570 shares||71.4%|
|Dennis Shaughnessy||Chairman||Dec 17-18||66,226||No||145,739 shares||31.2%|
There have been 686,291 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 FTI Consulting's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 693,991 shares sold and there have been zero shares purchased by insiders this year. The month of December has seen the most insider selling.
FTI Consulting reported the third-quarter financial results on November 7 with the following highlights:
|Adjusted net income||$29.2 million|
|Net loss||$50.6 million|
(Source: November presentation)
FTI Consulting's 2013 guidance is as follows:
FTI Consulting has the second-highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only FTI Consulting has seen intensive insider selling during the last 30 days.
There have been seven different insiders selling FTI Consulting and there have not been any insiders buying FTI Consulting during the last 30 days. All seven of these insiders decreased their holdings by more than 10%. FTI Consulting has an insider ownership of 1.40%.
FTI Consulting is trading at a forward P/E ratio of 16.71 and the company has a book value of $26.50 per share. Before entering short FTI Consulting, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.