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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%.

Stanley Black & Decker (NYSE:SWK) provides power and hand tools, mechanical access solutions, and electronic security and monitoring systems for various industrial applications primarily in the United States, Canada, Europe, and Asia.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Stanley Black & Decker's insider-trading activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Michael BartoneVPFeb 123,049No42,626 shares6.7%
Bruce BeattSVPFeb 115,673No42,992 shares11.7%
Joseph VoelkerSVPJan 316,830No

23,579 shares + 5,625 options

19.0%

There have been 15,552 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Stanley Black & Decker's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 20148,7220
January 20146,8300
December 201300
November 201300
October 201300
September 20133,1250
August 201372,0670
July 201375,9050
June 20131,7360
May 2013135,3350
April 201300
March 2013174,2860
February 2013478,8340
January 201357,2840

There have been 1,014,124 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Stanley Black & Decker reported the full-year 2013 financial results on January 24 with the following highlights:

Revenue$11.0 billion
Net income$490.3 million
Cash$496.2 million
Debt$4.2 billion

Outlook

Stanley Black & Decker's 2014 guidance is as follows:

Organic revenue growth~4%
GAAP EPS$5.18-$5.38

(Source: Investor presentation)

Competition

Stanley Black & Decker's competitors include Danaher Corp. (NYSE:DHR) and Makita Corporation (OTCPK:MKTAY). Here is a table comparing these companies.

CompanySWKDHRMKTAY
Market Cap:12.65B53.36B7.33B
Employees:N/A66,00012,742
Qtrly Rev Growth (yoy):0.090.060.30
Revenue:11.00B19.12B4.66B
Gross Margin:0.360.520.36
EBITDA:1.57B4.17B774.40M
Operating Margin:0.100.170.14
Net Income:518.30M2.70B489.03M
EPS:3.083.803.60
P/E:26.3720.1115.00
PEG (5 yr expected):1.381.54N/A
P/S:1.142.781.54

Stanley Black & Decker has the highest P/E ratio among these three companies.

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

CompanyInsider buying / sharesInsider selling / shares
DHR0128,000
MKTAYN/AN/A

Only Stanley Black & Decker has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Stanley Black & Decker, and there have not been any insiders buying Stanley Black & Decker during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Stanley Black & Decker has an insider ownership of 1.00%.

Stanley Black & Decker has a $56 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $56 price target. I would place a stop loss at $92, which is the all-time high. The three main reasons for the proposed short entry are bearish Point and Figure chart, relatively high P/E ratio, and the intensive insider-selling activity.

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Source: Stanley Black & Decker: 3 Different Insiders Have Sold Shares This Year