In this article, I will feature one consumer 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%.
Harley-Davidson (NYSE:HOG) manufactures heavyweight cruiser and touring motorcycles.
Insider selling during the last 30 days
Here is a table of Harley-Davidson'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|
|Paul Jones||VP||Feb 7||30,000||No||11,620 shares + 42,352 options||35.7%|
|Keith Wandell||CEO||Feb 6||50,000||No||190,935 shares + 584,968 options||6.1%|
|Tonit Calaway||VP||Feb 6-7||11,124||No||10,911 shares + 34,542 options||19.7%|
|Joanne Bischmann||VP||Feb 6-7||2,323||No||11,313 shares + 60,033 options||3.2%|
There have been 93,447 shares sold by insiders during the last 30 days.
Insider selling by calendar month
Here is a table of Harley-Davidson's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 278,642 shares sold, and there have been zero shares purchased by insiders since January 2013.
Harley-Davidson reported the full-year 2013 financial results on January 30 with the following highlights:
|Net income||$734.0 million|
(Source: Earnings presentation)
Harley-Davidson expects to ship 279,000 to 284,000 motorcycles to dealers and distributors worldwide in 2014, an approximate 7% to 9% increase from 2013 shipments. In the first quarter of 2014, the company expects to ship 76,500 to 81,500 motorcycles, compared to 75,222 motorcycles shipped in the year-ago period.
(Source: Earnings presentation)
Harley-Davidson's competitors include Honda Motor Company (NYSE:HMC), Suzuki Motor (OTCPK:SZKMF), Yamaha Motor (OTCPK:YAMHF), and Kawasaki Heavy Industries (OTCPK:KWHIY). Here is a table comparing these companies.
|Qtrly Rev Growth (yoy):||0.02||0.25||0.19||0.24||0.49|
|PEG (5 yr expected):||1.04||N/A||N/A||N/A||N/A|
Harley-Davidson has the highest P/S ratio among these five companies.
There have been four different insiders selling Harley-Davidson, and there have not been any insiders buying Harley-Davidson during the last 30 days. Two of these four insiders decreased their holdings by more than 10%. Harley-Davidson has an insider ownership of 0.10%.
Harley-Davidson has a $51 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $51 price target. I would place a stop loss at $70, which is the all-time high. The three main reasons for the proposed short entry are bearish Point and Figure chart, relatively high P/S ratio, and the intensive insider-selling activity.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in HOG over 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.