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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%.

Apogee Enterprises (NASDAQ:APOG) engages in the design and development of glass products, services, and systems primarily in North America, Europe, and Brazil.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
David WeissDirectorJan 2110,000No31,829 shares23.9%
Robert MarzecDirectorJan 96,373No25,291 shares20.1%
John ManningDirectorJan 325,383No

29,937 shares

45.9%
Sara HaysDirectorJan 64,311No21,851 shares16.5%
Patricia BeithonGeneral CounselJan 2-322,000No178,665 shares11.0%
Bernard AldrichDirectorJan 37,375No24,958 shares22.8%
Gary JohnsonVPDec 304,687No48,937 shares8.7%
James PorterCFODec 305,689No117,747 shares4.6%

There have been 85,818 shares sold by insiders during the last 30 days.

Insider selling by calendar month

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

MonthInsider selling / sharesInsider buying / shares
January 201475,4420
December 201363,8820
November 201300
October 201300
September 201300
August 201300
July 201328,6040
June 201300
May 201300
April 20136,5000
March 201300
February 201300
January 201300

There have been 174,428 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

Apogee reported the fiscal 2014 third-quarter, which ended November 30, financial results on December 18 with the following highlights:

Revenue$199.4 million
Net income$9.7 million
Cash$22.5 million
Debt$20.7 million
Backlog$299.9 million

(click to enlarge)

(Source: December presentation)

Outlook

Apogee's fiscal 2014 full-year guidance is as follows:

Revenue growth10%-11%
EPS$0.95-$1.00
Gross margin~22%

Competition

Apogee's competitors include Headwaters (NYSE:HW), NCI Building Systems (NYSE:NCS), and PGT, Inc. (NASDAQ:PGTI). Here is a table comparing these companies.

CompanyAPOGHWNCSPGTI
Market Cap:1.04B782.76M1.41B487.81M
Employees:3,8712,3554,4841,040
Qtrly Rev Growth (yoy):0.050.130.110.45
Revenue:736.76M702.58M1.31B222.48M
Gross Margin:0.210.270.210.34
EBITDA:61.10M107.63M46.07M33.17M
Operating Margin:0.050.080.010.10
Net Income:24.01M8.28M-12.89M24.67M
EPS:0.830.10-0.290.44
P/E:43.32104.90N/A23.47
PEG (5 yr expected):5.44N/A3.140.54
P/S:1.461.151.132.31

Apogee has the second-highest P/S ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
HW052,408
NCS14,57010,997,652
PGTI020,664,021

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

Conclusion

There have been eight different insiders selling Apogee, and there have not been any insiders buying Apogee during the last 30 days. Six of these eight insiders decreased their holdings by more than 10%. Apogee has an insider ownership of 2.60%.

Before going short Apogee, 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: Apogee Enterprises: 8 Different Insiders Have Sold Shares During The Last 30 Days