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:
- 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%.
Thermo Fisher Scientific (NYSE:TMO) provides analytical instruments, equipment, reagents and consumables, software, and services for research, manufacture, analysis, discovery, and diagnostics.
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%|
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|
There have been 646,098 shares sold, and there have been zero shares purchased by insiders since January 2013.
Thermo Fisher reported the full-year 2013 financial results on January 30 with the following highlights:
|Net income||$1.3 billion|
Thermo Fisher's 2014 guidance is as follows:
|Qtrly Rev Growth (yoy):||0.06||-0.03||0.06|
|PEG (5 yr expected):||1.30||1.94||1.95|
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|
Only Thermo Fisher has seen intensive insider selling during the last 30 days.
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.