Xylem: 4 Different Insiders Have Sold Shares This Year

Feb.11.14 | About: Xylem, Inc. (XYL)

In this article, I will feature one industrial 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%.

Xylem (NYSE:XYL) engages in the design, manufacture, and application of engineered technologies for water and wastewater applications.

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Insider selling during the last 30 days

Here is a table of Xylem'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
Colin Sabol SVP Feb 6 10,504 No 42,497 shares 19.8%
Kenneth Napolitano SVP Feb 7 28,846 No 52,856 shares 35.3%
Angela Buonocore SVP Feb 6 11,996 No 58,192 shares 17.1%
Steven Loranger CEO Jan 15 89,235 Yes 228,069 shares 28.1%
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There have been 140,581 shares sold by insiders during the last 30 days. Steven Loranger 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 Xylem's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 51,346 0
January 2014 89,235 0
December 2013 0 0
November 2013 1,551 0
October 2013 9,975 0
September 2013 2,480 0
August 2013 0 0
July 2013 10,981 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 165,568 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.


Xylem reported the full-year 2013 financial results on February 4 with the following highlights:

Revenue $3.8 billion
Net income $228 million
Cash $533 million
Debt $1.2 billion
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(Source: Earnings presentation)


Xylem's 2014 guidance is as follows:

Revenue ~$4 billion
Adjusted net income $345-$370 million
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(Source: Earnings presentation)


Xylem's competitors include Siemens AG (SI), Danaher Corporation (NYSE:DHR), and Thermo Fisher Scientific (NYSE:TMO). Here is a table comparing these companies.

Market Cap: 6.82B 107.74B 52.44B 42.61B
Employees: 12,500 360,000 66,000 39,000
Qtrly Rev Growth (yoy): 0.07 -0.03 0.06 0.06
Revenue: 3.84B 97.47B 19.12B 13.09B
Gross Margin: 0.39 0.28 0.52 0.44
EBITDA: 559.00M 10.00B 4.17B 2.79B
Operating Margin: 0.11 0.07 0.17 0.14
Net Income: 228.00M 5.59B 2.70B 1.28B
EPS: 1.22 0.66 3.80 3.48
P/E: 30.30 194.20 19.77 33.80
PEG (5 yr expected): 2.25 1.23 1.57 1.30
P/S: 1.78 1.10 2.69 3.16
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Xylem has the second-lowest gross margin 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
DHR 0 1,116,490
TMO 0 540,818
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Thermo Fisher has also seen intensive insider selling during the last 30 days.


There have been four different insiders selling Xylem, and there have not been any insiders buying Xylem during the last 30 days. All four of these insiders decreased their holdings by more than 10%. Xylem has an insider ownership of 0.20%.

Before going short Xylem, 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.