Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message| ()  

In this article, I will feature one healthcare 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%.

Bristol-Myers Squibb Company (BMY) discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Bristol-Myers' insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Charles BancroftCFOFeb 1425,000No77,303 shares24.4%
Brian DanielsSVPFeb 628,440No53,549 shares34.7%
Joseph CaldarellaSVPFeb 635,471No59,355 shares + 35,000 options27.3%
Lewis CampbellDirectorFeb 52,500No0 shares100%
James CorneliusDirectorFeb 4100,000No400,732 shares20.0%

There have been 191,411 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Bristol-Myers' insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 2014191,4110
January 201400
December 201300
November 201300
October 201300
September 201300
August 201300
July 2013105,0000
June 2013319,8170
May 2013795,9840
April 2013586,5070
March 2013236,8720
February 2013440,2840
January 2013143,3500

There have been 2,819,225 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Bristol-Myers reported the full-year 2013 financial results on January 24 with the following highlights:

Revenue$16.4 billion
Net income$2.6 billion
Net debt$68 million

Outlook

Bristol-Myers' 2014 guidance is as follows:

GAAP EPS$1.75-$1.90
Non-GAAP EPS$1.65-$1.80

Pipeline and upcoming milestones

Bristol-Myers' pipeline consists of the following candidates.

(Source: Investor presentation)

Competition

Bristol-Myers' competitors include AstraZeneca (AZN), Pfizer (PFE), and Roche (OTCQX:RHHBY). Here is a table comparing these companies.

CompanyBMYAZNPFERHHBY
Market Cap:89.95B83.28B206.62B254.03B
Employees:N/AN/AN/A85,080
Qtrly Rev Growth (yoy):0.06-0.06N/A0.01
Revenue:16.38B25.71B51.58B52.08B
Gross Margin:0.700.800.820.75
EBITDA:4.20B9.72B23.11B20.03B
Operating Margin:0.180.270.330.34
Net Income:2.56B2.56B11.34B11.96B
EPS:1.542.043.203.46
P/E:35.4732.489.9721.59
PEG (5 yr expected):2.28-3.156.692.50
P/S:5.493.244.014.88

Bristol-Myers has the highest P/S ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
AZNN/AN/A
PFE0742,861
RHHBYN/AN/A

Only Bristol-Myers has seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling Bristol-Myers, and there have not been any insiders buying Bristol-Myers during the last 30 days. All five of these insiders decreased their holdings by more than 10%. Bristol-Myers has an insider ownership of 0.10%.

There are 11 analyst buy ratings, nine neutral ratings, and one sell rating with an average price target of $53.71. Bristol-Myers has a $39 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $39 price target. I would place a stop loss at $57, which is the all-time high. The five main reasons for the proposed short entry are bearish Point and Figure chart, bearish analyst price targets, relatively high P/E ratio, relatively high P/S ratio, and the intensive insider-selling activity.

(click to enlarge)

Source: Bristol-Myers: 5 Different Insiders Have Sold Shares This Month