Myriad Genetics: 5 Different Insiders Have Sold Shares This Month

Feb.18.14 | About: Myriad Genetics, (MYGN)

In this article, I will feature one services sector 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%.

Myriad Genetics (NASDAQ:MYGN) focuses on the development and marketing of predictive medicine, personalized medicine, and prognostic medicine tests primarily in the United States.

Click to enlarge

Insider selling during the last 30 days

Here is a table of Myriad's insider-trading activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Richard Marsh EVP Feb 14 20,960 No 17,165 shares 55.0%
Robert Harrison CIO Feb 12 13,707 No 324 shares 97.7%
Mark Capone President, MGL Feb 10 87,500 No 48,268 shares + 81,945 options 40.2%
James Evans CFO Feb 7 35,000 No 47,609 shares 42.4%
Peter Meldrum CEO Feb 5 123,940 Yes 55,656 shares 69.0%
Click to enlarge

There have been 281,107 shares sold by insiders during the last 30 days. Peter Meldrum 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 Myriad's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 281,107 0
January 2014 0 0
December 2013 0 0
November 2013 39,856 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 31,498 0
May 2013 249,151 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
Click to enlarge

There have been 601,612 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of February 2014 has seen the most insider selling.

Financials

Myriad reported the fiscal 2014 second-quarter, which ended December 31, financial results on February 4 with the following highlights:

Revenue $204.1 million
Net income $50.4 million
Cash $488.8 million
Click to enlarge

Outlook

Myriad's guidance for the fiscal year 2014 is as follows:

Revenue $740-$750 million
EPS $2.09-$2.12
Click to enlarge

Competition

Myriad's competitors include Quest Diagnostics (NYSE:DGX), Bio-Reference Laboratories (NASDAQ:BRLI), and Laboratory Corp. of America Holdings (NYSE:LH). Here is a table comparing these companies.

Company MYGN DGX BRLI LH
Market Cap: 2.29B 7.57B 758.29M 8.12B
Employees: 1,325 N/A 3,338 34,000
Qtrly Rev Growth (yoy): 0.37 0.04 0.18 0.02
Revenue: 737.11M 7.15B 715.35M 5.81B
Gross Margin: 0.87 0.40 0.47 0.38
EBITDA: 300.47M 1.44B 101.71M 1.09B
Operating Margin: 0.40 0.16 0.11 0.17
Net Income: 187.79M 811.00M 45.83M 573.80M
EPS: 2.32 5.54 1.65 6.25
P/E: 13.58 9.50 16.59 14.71
PEG (5 yr expected): 0.99 1.33 1.05 1.43
P/S: 3.05 1.05 1.05 1.40
Click to enlarge

Myriad has the highest P/S ratio among these four companies.

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

Company Insider buying / shares Insider selling / shares
DGX 5,000 87,564
BRLI 0 20,000
LH 0 196,756
Click to enlarge

Only Myriad has seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling Myriad, and there have not been any insiders buying Myriad during the last 30 days. All five of these insiders decreased their holdings by more than 10%. Myriad has an insider ownership of 0.20%.

There are six analyst buy ratings, nine neutral ratings, and four sell ratings with an average price target of $29.31. Before going short Myriad, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are bearish analyst price targets, 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.