Sigma-Aldrich: 3 Different Insiders Have Sold Shares This Month

In this article, I will feature one specialty chemicals company 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%.

Sigma-Aldrich Corporation (NASDAQ:SIAL) develops, manufactures, purchases, and distributes various chemicals, biochemicals, and equipment worldwide.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Barrett Toan Director Feb 14 18,000 No 28,773 shares 38.5%
Michael Kanan VP Feb 11 517 No 5,761 shares + 5,410 options 4.4%
Gilles Cottier EVP Feb 11 28,600 No 24,958 shares + 15,775 options 41.3%
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There have been 47,117 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Sigma-Aldrich's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 47,117 0
January 2014 0 0
December 2013 10,200 0
November 2013 10,000 0
October 2013 0 0
September 2013 7,400 1,204
August 2013 0 44
July 2013 0 0
June 2013 0 0
May 2013 46,497 0
April 2013 28,913 0
March 2013 0 0
February 2013 0 1,000
January 2013 15,000 0
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There have been 165,127 shares sold, and there have been 2,248 shares purchased by insiders since January 2013. The month of February 2014 has seen the most insider selling.

Financials

Sigma-Aldrich reported the full-year 2013 financial results on February 6 with the following highlights:

Revenue $2.7 billion
Net income $491 million
Cash $722 million
Debt $365 million
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(Source: Earnings presentation)

Outlook

Sigma-Aldrich's 2014 guidance is as follows:

Organic sales growth low-to-mid single digit
Adjusted EPS $4.30-$4.40
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(Source: Earnings presentation)

Competition

Sigma-Aldrich's competitors include Bayer AG (OTCPK:BAYRY). Here is a table comparing these two companies.

Company SIAL BAYRY
Market Cap: 11.49B 115.28B
Employees: 9,000 113,300
Qtrly Rev Growth (yoy): 0.04 -0.00
Revenue: 2.70B 51.98B
Gross Margin: 0.50 0.52
EBITDA: 821.00M 11.62B
Operating Margin: 0.25 0.16
Net Income: 491.00M 4.07B
EPS: 4.06 4.92
P/E: 23.68 28.33
PEG (5 yr expected): 3.36 2.06
P/S: 4.27 2.20
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Sigma-Aldrich has a higher P/S ratio than its direct competitor.

Conclusion

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

There are two analyst buy ratings, 11 neutral ratings, and four sell ratings with an average price target of $90. Before going short Sigma-Aldrich, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are bearish analyst price targets, relatively high P/S ratio, 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.