PNC Financial Services: 5 Different Insiders Have Sold Shares This Year

Jan.27.14 | About: PNC Financial (PNC)

In this article, I will feature one bank 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%.

The PNC Financial Services Group (NYSE:PNC) operates as a diversified financial services company in the United States and internationally.

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Insider selling during the last 30 days

Here is a table of PNC'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
Neil Hall EVP Jan 22 98,133 No 32,243 shares + 6,667 options 71.6%
Michael Hannon EVP Jan 21 58,000 No 46,491 shares + 25,000 options 44.8%
Joseph Guyaux SVC Jan 22 136,584 No

56,697 shares

70.7%
Orlando Esposito EVP Jan 9-16 4,310 Yes 18,620 shares 18.8%
Joan Gulley EVP Jan 2 2,000 Yes 12,696 shares 13.6%
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There have been 299,027 shares sold by insiders during the last 30 days. Orlando Esposito and Joan Gulley sold shares pursuant to a Rule 10b5-1 plan. 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 PNC's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
January 2014 299,027 0
December 2013 208,507 0
November 2013 4,200 0
October 2013 60,759 0
September 2013 91,400 0
August 2013 80,000 0
July 2013 159,962 0
June 2013 32,220 0
May 2013 496,346 0
April 2013 429,804 0
March 2013 22,500 0
February 2013 37,013 0
January 2013 54,942 0
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There have been 1,976,680 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

PNC reported the full-year 2013 financial results on January 16 with the following highlights:

Revenue $16.0 billion
Net income $4.2 billion
Book value $72.21 per share
Tangible book value $54.68 per share
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(Source: Earnings presentation)

Outlook

PNC expects first quarter net interest income to be down modestly compared to the fourth quarter of 2013.

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(Source: Earnings presentation)

Competition

PNC's competitors include Bank of America Corporation (NYSE:BAC), and
JPMorgan Chase & Co. (NYSE:JPM). Here is a table comparing these companies.

Company PNC BAC JPM
Market Cap: 43.28B 176.10B 223.16B
Employees: N/A 242,117 251,196
Qtrly Rev Growth (yoy): 0.05 0.28 0.00
Revenue: 15.37B 85.39B 96.38B
Operating Margin: 0.36 0.20 0.28
Net Income: 3.97B 10.08B 16.59B
EPS: 7.39 0.90 4.35
P/E: 11.02 18.38 12.75
PEG (5 yr expected): 1.51 0.61 1.62
P/S: 2.91 2.23 2.36
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PNC has the highest P/S ratio among these three companies.

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

Company Insider buying / shares Insider selling / shares
BAC 40,000 612,366
JPM

745,086

515,034
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Only PNC has seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling PNC, and there have not been any insiders buying PNC during the last 30 days. All five of these insiders decreased their holdings by more than 10%. PNC has an insider ownership of 0.20%.

Before going short PNC, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are 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.