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:
- 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%.
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.
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%|
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|
There have been 1,383,220 shares sold, and there have been zero shares purchased by insiders since January 2013.
Lockheed Martin reported the full-year 2013 financial results on January 23 with the following highlights:
|Net income||$3.0 billion|
Lockheed Martin's 2014 guidance is as follows:
|Qtrly Rev Growth (yoy):||-0.05||0.07||-0.05||-0.09|
|PEG (5 yr expected):||2.05||1.69||1.66||1.10|
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|
Only Lockheed Martin has seen intensive insider selling during the last 30 days.
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.