BE Aerospace: 6 Different Insiders Have Sold Shares During The Last 30 Days

Jan. 8.14 | About: B/E Aerospace (BEAV)

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:

  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%.

BE Aerospace (NASDAQ:BEAV) designs, manufactures, sells, and services cabin interior products for commercial aircraft and business jets worldwide.

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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%
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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
December 2013 121,071 0
November 2013 2,108 0
October 2013 0 0
September 2013 0 0
August 2013 4,500 0
July 2013 2,126 0
June 2013 0 0
May 2013 7,831 0
April 2013 2,108 0
March 2013 6,967 0
February 2013 3,794 0
January 2013 0 0
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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.

Financials

BE Aerospace reported the third-quarter financial results on October 23 with the following highlights:

Revenue $888.1 million
Net income $92.7 million
Cash $573.8 million
Debt $2.0 billion
Backlog $8.8 billion
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(Source: Earnings presentation)

Outlook

BA Aerospace's guidance is as follows:

FY2013 FY2014
Revenue N/A $4.0 billion
EPS $3.52 $4.25
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(Source: Earnings presentation)

Competition

BE Aerospace's competitors include Wesco Aircraft (NYSE:WAIR), and United Technologies (NYSE:UTX). Here is a table comparing these companies.

Company BEAV WAIR UTX
Market Cap: 9.01B 2.07B 103.59B
Employees: 9,500 1,354 218,000
Qtrly Rev Growth (yoy): 0.16 0.11 0.03
Revenue: 3.38B 901.61M 62.31B
Gross Margin: 0.38 0.36 0.28
EBITDA: 727.70M 192.18M 11.09B
Operating Margin: 0.19 0.20 0.15
Net Income: 350.20M 104.81M 5.18B
EPS: 3.38 1.09 6.92
P/E: 25.41 19.93 16.32
P/S: 2.65 2.29 1.66
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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
WAIR 0 244,398
UTX

0

0
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Wesco Aircraft has also seen intensive insider selling during the last 30 days.

Conclusion

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.

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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.