Nexstar: 3 Different Insiders Have Sold Shares This Month

Dec.26.13 | About: Nexstar Broadcasting (NXST)

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.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Thomas Carter CFO Dec 23 5,000 No 64,947 shares + 115,000 options 2.7%
Blake Russell SVP Dec 20 10,000 No 22,860 shares + 55,000 options 11.4%
Brian Jones EVP Dec 13 25,000 No 10,500 shares + 105,000 options 17.8%
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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.

Month Insider selling / shares Insider buying / shares
December 2013 40,000 0
November 2013 95,000 0
October 2013 0 0
September 2013 394,250 0
August 2013 910 0
July 2013 0 0
June 2013 483,000 0
May 2013 3,943,376 0
April 2013 0 0
March 2013 84,983 184
February 2013 3,450,000 0
January 2013 0 0
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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.

Company NXST CBS SBGI
Market Cap: 1.69B 37.54B 3.47B
Employees: 2,099 20,930 4,000
Qtrly Rev Growth (yoy): 0.40 0.11 0.31
Revenue: 480.38M 15.07B 1.26B
Gross Margin: 0.72 0.43 0.58
EBITDA: 168.40M 3.68B 466.75M
Operating Margin: 0.23 0.21 0.27
Net Income: 171.76M 1.81B 117.97M
EPS: 5.49 2.85 1.46
P/E: 10.09 21.88 23.62
PEG (5 yr expected): 35.44 N/A 10.42
P/S: 3.41 2.46 2.75
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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.

Company Insider buying / shares Insider selling / shares
CBS 0 120,723
SBGI 0 81,749
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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.

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.