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In this article, I will feature one consumer 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%.

American Woodmark Corporation (NASDAQ:AMWD) engages in the manufacture and distribution of kitchen cabinets and vanities for the remodeling and new home construction markets in the United States.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Steven DunstonCOODec 26-3119,826Yes32,407 shares + 4,174 options35.1%
William BrandtDirectorDec 4-2712,000Yes2,858,929 shares0.4%
Roger CampbellSVPDec 131,666No10,284 shares + 3,334 options10.9%

There have been 33,492 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 American Woodmark's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
December 201343,4920
November 201312,0000
October 201373,0000
September 2013102,0000
August 201316,4570
July 201319,5800
June 201370,2770
May 201326,2330
April 201315,0000
March 201381,3730
February 2013149,4670
January 20139,0000

There have been 617,879 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

American Woodmark reported the fiscal 2014 second-quarter, which ended October 31, financial results on November 26 with the following highlights:

Revenue$190.5 million
Net income$5.3 million
Cash$118.5 million
Debt$25.0 million

Outlook

American Woodmark's business has historically been subject to seasonal influences, with higher sales typically realized in the second and fourth fiscal quarters.

Competition

American Woodmark's competitors include Masco (NYSE:MAS), and Fortune Brands Home & Security (NYSE:FBHS). Here is a table comparing these companies.

CompanyAMWDMASFBHS
Market Cap:587.05M8.10B7.55B
Employees:4,53730,00016,100
Qtrly Rev Growth (yoy):0.190.120.24
Revenue:691.05M8.26B4.00B
Gross Margin:0.180.260.34
EBITDA:42.29M782.00M405.30M
Operating Margin:0.050.070.08
Net Income:19.17M144.00M183.90M
EPS:1.260.381.07
P/E:30.2759.0942.30
PEG (5 yr expected):N/AN/A1.07
P/S:0.880.981.90

American Woodmark has the lowest gross margin among these three companies.

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

CompanyInsider buying / sharesInsider selling / shares
MAS5,0000
FBHS

0

54,220

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

Conclusion

There have been three different insiders selling American Woodmark, and there have not been any insiders buying American Woodmark during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. American Woodmark has an insider ownership of 19.10%.

Before entering short American Woodmark, 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.

Source: American Woodmark: 3 Different Insiders Have Sold Shares During The Last 30 Days