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In this article, I will feature one financial 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%.

Northern Trust Corporation (NASDAQ:NTRS) provides asset servicing, fund administration, asset management, fiduciary, and banking solutions worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Frederick WaddellCEOJan 2475,000No430,538 shares14.8%
Kelly WelshEVPJan 2224,948Yes85,428 shares22.6%
Jeffrey CohodesEVPJan 1610,000Yes

41,106 shares

19.6%
Stephen PotterPresident, NTGIJan 823,030Yes103,106 shares18.3%

There have been 132,978 shares sold by insiders during the last 30 days. Kelly Welsh, Jeffrey Cohodes, and Stephen Potter 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 Northern Trust's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2014132,9780
December 201300
November 201300
October 201300
September 201300
August 201300
July 2013239,0460
June 201300
May 2013224,3340
April 201376,0310
March 201361,0000
February 201360,0000
January 2013112,5520

There have been 905,941 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Northern Trust reported the 2013 full-year financial results on January 22 with the following highlights:

Revenue$4.1 billion
Net income$731.3 million
Book value$33.34 per share

(Source: Earnings presentation)

Competition

Northern Trust's competitors include The Bank of New York Mellon Corporation (NYSE:BK), JPMorgan Chase & Co. (NYSE:JPM), and State Street Corporation (NYSE:STT). Here is a table comparing these companies.

CompanyNTRSBKJPMSTT
Market Cap:14.37B36.80B221.96B29.98B
Employees:14,80051,100251,196N/A
Qtrly Rev Growth (yoy):0.08-0.020.000.00
Revenue:4.07B15.02B96.38B9.89B
Operating Margin:0.260.270.280.28
Net Income:719.40M2.01B16.59B2.10B
EPS:2.991.744.354.62
P/E:20.2518.4112.6614.78
PEG (5 yr expected):1.582.011.592.22
P/S:3.532.442.303.04

Northern Trust has the 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
BK0296,303
JPM745,086515,034
STT0819,254

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

Conclusion

There have been four different insiders selling Northern Trust, and there have not been any insiders buying Northern Trust during the last 30 days. All four of these insiders decreased their holdings by more than 10%. Northern Trust has an insider ownership of 0.30%.

Before going short Northern Trust, 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.

Source: Northern Trust: 4 Different Insiders Have Sold Shares This Year