Lockheed Martin: 6 Different Insiders Have Sold Shares This Year

Feb.13.14 | About: Lockheed Martin (LMT)

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%.

Lockheed Martin Corporation (NYSE:LMT) engages in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products for defense, civil, and commercial applications in the United States and internationally.

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Insider selling during the last 30 days

Here is a table of Lockheed Martin'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
Richard Edwards EVP Feb 7 1,660 No 4,744 shares 25.9%
Kenneth Possenriede VP Jan 31 9,827 No 3,955 shares + 5,573 options 50.8%
Christopher Gregoire VP Feb 3 11,784 No 417 shares + 5,960 options 64.9%
Richard Ambrose EVP Feb 3 10,239 No 107 shares + 4,787 options 67.7%
Patrick Dewar EVP Feb 4 29,838 No 115 shares + 15,453 options 65.7%
Marillyn Hewson CEO Jan 27 32,545 No 23,050 shares 58.5%
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There have been 95,893 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Lockheed Martin's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 53,521 0
January 2014 42,372 0
December 2013 0 0
November 2013 0 0
October 2013 6,314 0
September 2013 5,000 0
August 2013 121,100 0
July 2013 58,575 0
June 2013 5,826 0
May 2013 1,061,639 0
April 2013 28,873 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 1,383,220 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Lockheed Martin reported the full-year 2013 financial results on January 23 with the following highlights:

Revenue $45.4 billion
Net income $3.0 billion
Cash $2.6 billion
Debt $6.2 billion
Backlog $82.6 billion
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LMT Revenue (<a href=

Outlook

Lockheed Martin's 2014 guidance is as follows:

Revenue $44.0-$45.5 billion
EPS $10.25-$10.55
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Competition

Lockheed Martin's competitors include The Boeing Company (NYSE:BA), Northrop Grumman Corporation (NYSE:NOC), and Raytheon Company (NYSE:RTN). Here is a table comparing these companies.

Company LMT BA NOC RTN
Market Cap: 50.26B 96.73B 25.34B 30.06B
Employees: 115,000 168,400 65,300 63,000
Qtrly Rev Growth (yoy): -0.05 0.07 -0.05 -0.09
Revenue: 45.36B 86.62B 24.66B 23.71B
Gross Margin: 0.09 0.15 0.22 0.22
EBITDA: 5.50B 8.17B 3.62B 3.38B
Operating Margin: 0.10 0.07 0.13 0.12
Net Income: 2.95B 4.59B 1.95B 1.93B
EPS: 9.14 5.96 8.35 6.16
P/E: 17.25 21.72 14.00 15.31
PEG (5 yr expected): 2.05 1.69 1.66 1.10
P/S: 1.11 1.12 1.03 1.27
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Lockheed Martin has the lowest gross margin among these four companies.

Here is a table of these competitors' insider-trading activities during the last three months.

Company Insider buying / shares Insider selling / shares
BA 0 18,911
NOC 0 157,720
RTN 0 20,214
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Only Lockheed Martin has seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling Lockheed Martin, and there have not been any insiders buying Lockheed Martin during the last 30 days. All six of these insiders decreased their holdings by more than 10%. Lockheed Martin has an insider ownership of 0.10%.

Before going short Lockheed Martin, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are negative revenue growth, 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.