In this article, I will feature one industrial stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
BE Aerospace (NASDAQ:BEAV) designs, manufactures, sells, and services cabin interior products for commercial aircraft and business jets worldwide.
Insider selling during the last 30 days
Here is a table of BE Aerospace'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|
|Wayne Exton||VP||Dec 19||3,000||No||29,864 shares||9.1%|
|Thomas McCaffrey||CFO||Dec 16-17||28,934||No||39,771 shares||42.1%|
|Ryan Patch||VP||Dec 16-17||8,346||No||24,471 shares||25.4%|
|Werner Lieberherr||COO||Dec 16-17||17,539||No||70,750 shares||19.9%|
|Amin Khoury||CEO||Dec 16-17||58,340||No||180,147 shares||24.5%|
|Sean Cromie||VP||Dec 16-17||4,912||No||23,047 shares||17.6%|
There have been 121,071 shares sold by insiders during the last 30 days.
Insider selling by calendar month
Here is a table of BE Aerospace's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 150,505 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of December has seen the most insider selling.
BE Aerospace reported the third-quarter financial results on October 23 with the following highlights:
|Net income||$92.7 million|
(Source: Earnings presentation)
BA Aerospace's guidance is as follows:
(Source: Earnings presentation)
|Qtrly Rev Growth (yoy):||0.16||0.11||0.03|
BE Aerospace 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|
Wesco Aircraft has also seen intensive insider selling during the last 30 days.
There have been six different insiders selling BE Aerospace, and there have not been any insiders buying BE Aerospace during the last 30 days. Five of these six insiders decreased their holdings by more than 10%. BE Aerospace has an insider ownership of 0.40%.
BE Aerospace has a $78 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $78 price target. I would place a stop loss at $88, which is the all-time high. The four main reasons for the proposed short entry are bearish Point and Figure chart, relatively high P/S ratio, relatively high P/E ratio, and the intensive insider-selling activity.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in BEAV, over 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.