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In this article, I will feature one broadcasting 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%.

Nexstar Broadcasting Group (NASDAQ:NXST) focuses on the acquisition, development, and operation of television stations and interactive community websites in medium-sized markets in the United States.

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Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Thomas CarterCFODec 235,000No64,947 shares + 115,000 options2.7%
Blake RussellSVPDec 2010,000No22,860 shares + 55,000 options11.4%
Brian JonesEVPDec 1325,000No10,500 shares + 105,000 options17.8%

There have been 40,000 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 Nexstar's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
December 201340,0000
November 201395,0000
October 201300
September 2013394,2500
August 20139100
July 201300
June 2013483,0000
May 20133,943,3760
April 201300
March 201384,983184
February 20133,450,0000
January 201300

There have been 8,491,519 shares sold and there have been 184 shares purchased by insiders this year.

Financials

Nexstar reported the third-quarter financial results on November 5 with the following highlights:

Revenue$125.8 million
Net income$3.6 million
Cash$24.6 million
Debt$1.0 billion

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(Source: December presentation)

Outlook

Nexstar expects to generate free cash flow of approximately $330 million in the 2014/2015 cycle.

Competition

Nexstar's competitors include CBS Corporation (NYSE:CBS), and Sinclair Broadcast Group (NASDAQ:SBGI). Here is a table comparing these companies.

CompanyNXSTCBSSBGI
Market Cap:1.69B37.54B3.47B
Employees:2,09920,9304,000
Qtrly Rev Growth (yoy):0.400.110.31
Revenue:480.38M15.07B1.26B
Gross Margin:0.720.430.58
EBITDA:168.40M3.68B466.75M
Operating Margin:0.230.210.27
Net Income:171.76M1.81B117.97M
EPS:5.492.851.46
P/E:10.0921.8823.62
PEG (5 yr expected):35.44N/A10.42
P/S:3.412.462.75

Nexstar has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities during the last 30 days.

CompanyInsider buying / sharesInsider selling / shares
CBS0120,723
SBGI081,749

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

Conclusion

There have been three different insiders selling Nexstar and there have not been any insiders buying Nexstar during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Nexstar has an insider ownership of 0.50%.

There are five analyst buy ratings, one neutral rating, and zero sell ratings with an average price target of $54.75. Before entering short Nexstar, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are relatively high P/S ratio, bearish analyst price targets, and the intensive insider-selling activity.

Source: Nexstar: 3 Different Insiders Have Sold Shares This Month