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 |
| February 2014 | 93,447 | 0 |
| January 2014 | 0 | 0 |
| December 2013 | 0 | 0 |
| November 2013 | 1,006 | 0 |
| October 2013 | 8,883 | 0 |
| September 2013 | 0 | 0 |
| August 2013 | 122,225 | 0 |
| July 2013 | 0 | 0 |
| June 2013 | 0 | 0 |
| May 2013 | 0 | 0 |
| April 2013 | 0 | 0 |
| March 2013 | 0 | 0 |
| February 2013 | 37,469 | 0 |
| January 2013 | 15,612 | 0 |
There have been 278,642 shares sold, and there have been zero shares purchased by insiders since January 2013.
Financials
Harley-Davidson reported the full-year 2013 financial results on January 30 with the following highlights:
| Revenue | $5.9 billion |
| Net income | $734.0 million |
| Cash | $1.2 billion |
| Debt | $5.3 billion |
(Source: Earnings presentation)
Outlook
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)
Competition
Harley-Davidson's competitors include Honda Motor Company (HMC), Suzuki Motor (OTCPK:SZKMF), Yamaha Motor (OTCPK:YAMHF), and Kawasaki Heavy Industries (OTCPK:KWHIY). Here is a table comparing these companies.
| Company | HOG | HMC | SZKMF | YAMHF | KWHIY |
|---|---|---|---|---|---|
| Market Cap: | 14.25B | 65.75B | 14.70B | 4.45B | 27.83B |
| Employees: | N/A | 190,338 | N/A | N/A | N/A |
| Qtrly Rev Growth (yoy): | 0.02 | 0.25 | 0.19 | 0.24 | 0.49 |
| Revenue: | 5.90B | 146.01B | 34.58B | 17.10B | 16.82B |
| Gross Margin: | 0.36 | 0.26 | N/A | N/A | N/A |
| EBITDA: | 1.32B | 17.66B | 3.40B | 939.54M | 1.44B |
| Operating Margin: | 0.20 | 0.06 | 0.06 | 0.03 | 0.05 |
| Net Income: | 733.99M | 6.09B | 1.15B | 248.13M | 442.37M |
| EPS: | 3.28 | 3.38 | 1.96 | 0.71 | 0.27 |
| P/E: | 19.69 | 10.79 | 13.40 | 17.92 | 62.83 |
| PEG (5 yr expected): | 1.04 | N/A | N/A | N/A | N/A |
| P/S: | 2.43 | 0.45 | 0.42 | 0.26 | 1.68 |
Harley-Davidson has the highest P/S ratio among these five companies.
Conclusion
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.
