Balchem: 6 Different Insiders Have Sold Shares This Month

Dec.29.13 | About: Balchem Corporation (BCPC)

In this article, I will feature one animal health 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%.

Balchem Corporation (NASDAQ:BCPC) develops, manufactures, and sells specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally.

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Insider selling during the last 30 days

Here is a table of Balchem'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
Dino Rossi CEO Dec 23-24 15,000 Yes 131,457 shares 10.2%
Elaine Wedral Director Dec 13-18 14,743 No 29,697 shares 33.2%
Edward McMillan Director Dec 16 8,000 No 29,662 shares 21.2%
John Televantos Director Dec 13 2,000 No 34,481 shares 5.5%
David Ludwig VP Dec 10 13,500 Yes 31,025 shares 30.3%
Frank Fitzpatrick CFO Dec 2 13,500 Yes 55,902 shares 19.5%
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There have been 66,743 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 Balchem's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
December 2013 66,743 0
November 2013 42,000 0
October 2013 42,000 0
September 2013 79,488 0
August 2013 66,736 0
July 2013 28,500 0
June 2013 73,633 0
May 2013 54,729 0
April 2013 13,500 0
March 2013 27,000 0
February 2013 49,494 0
January 2013 46,392 0
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There have been 590,215 shares sold, and there have been zero shares purchased by insiders this year.

Financials

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

Revenue $87.6 million
Net income $11.7 million
Cash $190.2 million
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(Source: November presentation)

Competition

Balchem's competitors include Zoetis (NYSE:ZTS), and MWI Veterinary Supply (NASDAQ:MWIV). Here is a table comparing these companies.

Company BCPC ZTS MWIV
Market Cap: 1.79B 16.31B 2.27B
Employees: 376 9,300 1,732
Qtrly Rev Growth (yoy): 0.17 0.08 0.10
Revenue: 335.60M 4.48B 2.35B
Gross Margin: 0.29 0.64 0.13
EBITDA: 74.76M 1.16B 111.79M
Operating Margin: 0.19 0.21 0.04
Net Income: 44.02M 389.00M 62.85M
EPS: 1.44 0.78 4.95
P/E: 41.15 41.92 35.62
P/S: 5.34 3.63 0.97
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Balchem has the 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
ZTS 49,820 0
MWIV 0 36,526
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Only Balchem has seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling Balchem, and there have not been any insiders buying Balchem during the last 30 days. Five of these six insiders decreased their holdings by more than 10%. Balchem has an insider ownership of 1.40%.

There are three analyst buy ratings, one neutral rating, and zero sell ratings with an average price target of $54.00. Before entering short Balchem, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are bearish analyst price targets, 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.