Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message|
( followers)  

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%.

Dana Holding Corporation (NYSE:DAN) engages in the design, manufacture, and supply of driveline products, technologies, and service parts for vehicle manufacturers worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Mark WallaceEVPJan 2257,834No106,363 shares35.2%
Jacqueline DedoCSOJan 1644,695No61,676 shares + 28,240 options33.2%
Rodney FilcekSVPJan 174,000No18,955 shares17.4%

There have been 106,529 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Dana Holding's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2014106,5290
December 201300
November 201310,0000
October 201300
September 201355,3970
August 2013100,8630
July 201300
June 201300
May 201347,3100
April 201300
March 201310,0000
February 201300
January 201326,0000

There have been 356,099 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of January 2014 has seen the most insider selling.

Financials

Dana Holding reported the third-quarter financial results on October 29 with the following highlights:

Revenue$1.7 billion
Net loss$170 million
Cash$1.2 billion
Debt$1.6 billion

News

Dana Holding reported preliminary full-year 2013 results on January 14 with the following highlights:

Revenue$6.8 billion
Adjusted EBITDA$745 million
Cash$1.4 billion

(click to enlarge)

(Source: January presentation)

Outlook

Dana Holding's 2014 guidance is as follows:

Revenue$6.8-$6.9 billion
Adjusted EBITDA$760-$770 million
EPS$1.82-$1.86

(click to enlarge)

(Source: January presentation)

Competition

Dana Holding's competitors include American Axle & Manufacturing Holdings (NYSE:AXL), Magna International (NYSE:MGA), and Meritor (NYSE:MTOR). Here is a table comparing these companies.

CompanyDANAXLMGAMTOR
Market Cap:3.01B1.54B19.77B989.08M
Employees:23,40011,300125,0009,000
Qtrly Rev Growth (yoy):-0.030.170.13-0.08
Revenue:6.75B3.11B33.69B3.70B
Gross Margin:0.130.140.130.11
EBITDA:682.00M368.10M2.81B203.00M
Operating Margin:0.060.060.050.04
Net Income:29.00M384.60M1.45B-20.00M
EPS:0.205.026.23-0.23
P/E:104.014.0714.19N/A
PEG (5 yr expected):1.430.680.86-8.44
P/S:0.460.510.590.28

Dana Holding has the second-weakest revenue growth among these four companies.

Here is a table of these competitors' insider-trading activities during the last 12 months.

CompanyInsider buying / sharesInsider selling / shares
AXL090,150
MGA

50

412,189
MTOR3,26916,414

Only Dana Holding has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Dana Holding, and there have not been any insiders buying Dana Holding during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Dana Holding has an insider ownership of 0.10%.

Before going short Dana Holding, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are weak revenue growth, and the intensive insider-selling activity.

Source: Dana Holding: 3 Different Insiders Have Sold Shares This Year