In this article, I will feature one services sector 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%.
Norfolk Southern Corporation (NSC) engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States.
Insider selling during the last 30 days
Here is a table of Norfolk Southern'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|
|Deborah Butler||EVP||Jan 30||10,000||No||64,403 shares + 27,000 options||9.9%|
|Charles Moorman||CEO||Jan 28||72,977||No||302,849 shares + 2,023 options||19.3%|
|Mark Manion||COO||Jan 27||17,977||No||87,678 shares + 31,983 options||13.1%|
There have been 100,954 shares sold by insiders during the last 30 days.
Insider selling by calendar month
Here is a table of Norfolk Southern's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 377,040 shares sold, and there have been zero shares purchased by insiders since January 2013.
Norfolk Southern reported the full-year 2013 financial results on January 22 with the following highlights:
|Net income||$1.9 billion|
Norfolk Southern's business outlook for 2014 is as follows.
(Source: Earnings presentation)
|Qtrly Rev Growth (yoy):||0.07||0.05||0.07|
|PEG (5 yr expected):||1.42||1.43||1.18|
Norfolk Southern has the lowest gross margin 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|
Only Norfolk Southern has seen intensive insider selling during the last 30 days.
There have been three different insiders selling Norfolk Southern, and there have not been any insiders buying Norfolk Southern during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Norfolk Southern has an insider ownership of 0.40%.
Before going short Norfolk Southern, 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.