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%.
Green Mountain Coffee Roasters (GMCR) is engaged in the specialty coffee and coffeemaker businesses in the United States and Canada.
Insider selling during the last 30 days
Here is a table of Green Mountain Coffee Roasters' insider-trading activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Sylvain Toutant||President, Canada||Feb 10-11||10,921||No||325 shares + 16,843 options||38.9%|
|John Whoriskey||President, US Sales, Marketing||Feb 10-11||4,889||No||281 shares + 7,227 options||39.4%|
|Gerard Geoffrion||President, International||Feb 10||21,250||No||1,476 shares + 8,750 options||67.5%|
|Stephen Gibbs||VP||Feb 11||5,352||No|
116 shares + 8,199 options
|Jules del Vecchio||Director||Feb 11||60,500||No||281,903 shares + 20,500 options||16.7%|
|Linda Longo-Kazanova||VP||Feb 10||10,000||No||1,639 shares + 20,000 options||31.6%|
|Barbara Carlini||Director||Feb 10||20,250||No||14,434 shares||58.4%|
|David Moran||Director||Feb 6||20,000||Yes||6,114 shares + 21,000 options||42.5%|
|Hinda Miller||Director||Feb 6||19,800||Yes||79,516 shares||19.9%|
There have been 172,962 shares sold by insiders during the last 30 days. David Moran and Hinda Miller 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 Green Mountain Coffee Roasters' insider-trading activity by calendar month.
|Month||Insider buying / shares||Insider selling / shares|
There have been 39,000 shares purchased, and there have been 1,303,412 shares sold by insiders since January 2013.
Green Mountain Coffee Roasters reported the fiscal 2014 first-quarter, which ended December 28, financial results on February 5 with the following highlights:
|Net income [GAAP]||$138.2 million|
Green Mountain Coffee Roasters' guidance is as follows:
|Net sales growth||low-to-mid single digits over the second quarter of fiscal year 2013||high single digits over fiscal year 2013|
|Qtrly Rev Growth (yoy):||0.04||0.05||0.12|
|PEG (5 yr expected):||1.90||5.35||1.43|
Green Mountain Coffee Roasters has the highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities during the last three months.
|Company||Insider buying / shares||Insider selling / shares|
Only Green Mountain Coffee Roasters has seen intensive insider selling during the last 30 days.
There have been nine different insiders selling Green Mountain Coffee Roasters, and there have not been any insiders buying Green Mountain Coffee Roasters during the last 30 days. All nine of these insiders decreased their holdings by more than 10%. Green Mountain Coffee Roasters has an insider ownership of 0.10%.
Before going short Green Mountain Coffee Roasters, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high P/S ratio, and the intensive insider-selling activity.