FTI Consulting: 7 Different Insiders Have Sold Shares This Month

Dec.26.13 | About: FTI Consulting, (FCN)

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:

  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%.

FTI Consulting (NYSE:FCN) operates as a business advisory firm enabling organizations to protect enterprise values in complex economic, legal, and regulatory, environments worldwide.

Click to enlarge
(Click to enlarge)

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%
Click to enlarge

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
December 2013 686,291 0
November 2013 0 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 7,700 0
February 2013 0 0
January 2013 0 0
Click to enlarge

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.

Financials

FTI Consulting reported the third-quarter financial results on November 7 with the following highlights:

Revenue $414.6 million
Adjusted net income $29.2 million
Net loss $50.6 million
Cash $147.9 million
Debt $717.0 million
Click to enlarge

Click to enlarge
(Click to enlarge)

(Source: November presentation)

Outlook

FTI Consulting's 2013 guidance is as follows:

Revenue $1.62-$1.65 billion
Adjusted EPS $2.10-$2.20
Click to enlarge

Competition

FTI Consulting's competitors include CRA International (NASDAQ:CRAI), and Navigant Consulting (NYSE:NCI). Here is a table comparing these companies.

Company FCN CRAI NCI Industry Average (Management Services)
Market Cap: 1.66B 212.94M 969.16M 573.63M
Employees: 4,130 625 2,552 2.92K
Qtrly Rev Growth (yoy): 0.07 0.13 0.06 0.16
Revenue: 1.64B 270.29M 767.16M 551.10M
Gross Margin: 0.38 0.33 0.35 0.38
EBITDA: 265.76M 25.93M 129.33M 42.74M
Operating Margin: 0.13 0.07 0.14 0.07
Net Income: -89.33M -45.84M 55.98M N/A
EPS: -2.28 -4.55 1.01 0.01
P/E: N/A N/A 19.34 30.66
PEG (5 yr expected): 1.48 1.54 1.75 3.34
P/S: 0.99 0.79 1.25 1.04
Click to enlarge
Click to enlarge

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
CRAI 0 34,035
NCI 0 85,000
Click to enlarge

Only FTI Consulting has seen intensive insider selling during the last 30 days.

Conclusion

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.

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.