Thermo Fisher: 4 Different Insiders Have Sold Shares This Month

Feb.10.14 | About: Thermo Fisher (TMO)

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%.

Thermo Fisher Scientific (NYSE:TMO) provides analytical instruments, equipment, reagents and consumables, software, and services for research, manufacture, analysis, discovery, and diagnostics.

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Insider selling during the last 30 days

Here is a table of Thermo Fisher'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
Thomas Loewald SVP Feb 6 22,437 No 40,483 shares + 12,313 options 29.8%
Peter Wilver CFO Feb 6-7 91,897 No 104,305 shares 46.8%
Jim Manzi Director Feb 6 6,000 No 48,397 shares 11.0%
William Parrett Director Feb 6 18,000 No 11,188 shares 61.7%
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There have been 138,334 shares sold by insiders during the last 30 days.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
February 2014 138,334 0
January 2014 0 0
December 2013 0 0
November 2013 0 0
October 2013 0 0
September 2013 4,000 0
August 2013 4,000 0
July 2013 80,700 0
June 2013 261,807 0
May 2013 41,460 0
April 2013 0 0
March 2013 4,761 0
February 2013 5,756 0
January 2013 105,280 0
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There have been 646,098 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Thermo Fisher reported the full-year 2013 financial results on January 30 with the following highlights:

Revenue $13.1 billion
Net income $1.3 billion
Cash $5.8 billion
Debt $10.5 billion
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Outlook

Thermo Fisher's 2014 guidance is as follows:

Revenue $16.63-$16.83 billion
EPS $6.70-$6.90
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Competition

Thermo Fisher's competitors include Agilent Technologies (NYSE:A), and Becton, Dickinson and Company (NYSE:BDX). Here is a table comparing these companies.

Company TMO A BDX
Market Cap: 42.61B 19.72B 21.37B
Employees: 39,000 20,600 30,000
Qtrly Rev Growth (yoy): 0.06 -0.03 0.06
Revenue: 13.09B 6.78B 8.13B
Gross Margin: 0.44 0.52 0.52
EBITDA: 2.79B 1.39B 2.11B
Operating Margin: 0.14 0.15 0.20
Net Income: 1.28B 724.00M 930.00M
EPS: 3.48 2.10 4.73
P/E: 33.80 28.30 23.26
PEG (5 yr expected): 1.30 1.94 1.95
P/S: 3.16 2.85 2.60
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Thermo Fisher has the highest P/S ratio 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
A 0 665,626
BDX 0 142,842
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Only Thermo Fisher has seen intensive insider selling during the last 30 days.

Conclusion

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

Before going short Thermo Fisher, 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.