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:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- 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.
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.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Frederick Waddell||CEO||Jan 24||75,000||No||430,538 shares||14.8%|
|Kelly Welsh||EVP||Jan 22||24,948||Yes||85,428 shares||22.6%|
|Jeffrey Cohodes||EVP||Jan 16||10,000||Yes||
|Stephen Potter||President, NTGI||Jan 8||23,030||Yes||103,106 shares||18.3%|
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.
|Month||Insider selling / shares||Insider buying / shares|
There have been 905,941 shares sold, and there have been zero shares purchased by insiders since January 2013.
Northern Trust reported the 2013 full-year financial results on January 22 with the following highlights:
|Net income||$731.3 million|
|Book value||$33.34 per share|
(Source: Earnings presentation)
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.
|Qtrly Rev Growth (yoy):||0.08||-0.02||0.00||0.00|
|PEG (5 yr expected):||1.58||2.01||1.59||2.22|
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.
|Company||Insider buying / shares||Insider selling / shares|
Only Northern Trust has seen intensive insider selling during the last 30 days.
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.