Wright Medical Group: 3 Different Insiders Have Sold Shares This Year

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 |  About: Wright Medical Group, Inc. (WMGI), Includes: SYK, ZBH
by: Markus Aarnio

In this article, I will feature one healthcare 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%.

Wright Medical Group (NASDAQ:WMGI) is a specialty orthopedic company that provides extremity and biologic solutions that enable clinicians to alleviate pain and restore their patients’ lifestyles.

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Insider selling during the last 30 days

Here is a table of Wright Medical Group'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
OEPW, LLC 10% Owner Jan 21-23 3,015,191 No 2,879,558 shares 51.2%
Jennifer Walker SVP Jan 15 6,050 Yes 36,210 shares + 6,450 options 12.4%
Eric Stookey President, Extremities Jan 8 7,500 Yes 83,668 shares 8.2%
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There have been 3,028,741 shares sold by insiders during the last 30 days. Jennifer Walker and Eric Stookey 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 Wright Medical Group's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
January 2014 3,028,741 0
December 2013 0 0
November 2013 33,309 0
October 2013 250 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 3,062,300 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

Wright Medical Group reported the third-quarter financial results on November 4 with the following highlights:

Revenue $57.6 million
Net loss $130.0 million
Cash $292.4 million
Debt $265.0 million
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Net loss from continuing operations for the third quarter of 2013 included the after-tax effects of a $137.9 million net non-cash charge associated with the write-down to fair value of assets and liabilities associated with the BioMimetic acquisition.

Outlook

Wright Medical Group's 2013 guidance from continuing operations is as follows:

Revenue $237-$240 million
Adjusted EPS -$0.55 to -$0.59
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Competition

Wright Medical Group's competitors include Stryker (NYSE:SYK), and Zimmer Holdings (ZMH). Here is a table comparing these companies.

Company WMGI SYK ZMH
Market Cap: 1.41B 28.88B 15.94B
Employees: 1,400 N/A 9,300
Qtrly Rev Growth (yoy): 0.13 0.06 0.05
Revenue: 502.56M 9.02B 4.56B
Gross Margin: 0.69 0.67 0.74
EBITDA: 14.65M 1.72B 1.70B
Operating Margin: -0.06 0.16 0.30
Net Income: -134.64M 1.01B 677.90M
EPS: -3.09 2.63 3.95
P/E: N/A 29.02 23.63
PEG (5 yr expected): -3.59 1.79 1.72
P/S: 2.83 3.19 3.50
Short Float: 10.11% 1.45% 2.45%
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Wright Medical Group has the highest short float among these three companies.

Here is a table of these competitors' insider-trading activities during the last 30 days.

Company Insider buying / shares Insider selling / shares
SYK 0 14,000
ZMH 0 28,286
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Only Wright Medical Group has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Wright Medical Group, and there have not been any insiders buying Wright Medical Group during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Wright Medical Group has an insider ownership of 0.60%.

Before going short Wright Medical Group, 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.

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.