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:
- 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%.
Bristol-Myers Squibb Company (NYSE:BMY) discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide.
Insider selling during the last 30 days
Here is a table of Bristol-Myers' insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Charles Bancroft||CFO||Feb 14||25,000||No||77,303 shares||24.4%|
|Brian Daniels||SVP||Feb 6||28,440||No||53,549 shares||34.7%|
|Joseph Caldarella||SVP||Feb 6||35,471||No||59,355 shares + 35,000 options||27.3%|
|Lewis Campbell||Director||Feb 5||2,500||No||0 shares||100%|
|James Cornelius||Director||Feb 4||100,000||No||400,732 shares||20.0%|
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.
|Month||Insider selling / shares||Insider buying / shares|
There have been 2,819,225 shares sold, and there have been zero shares purchased by insiders since January 2013.
Bristol-Myers reported the full-year 2013 financial results on January 24 with the following highlights:
|Net income||$2.6 billion|
|Net debt||$68 million|
Bristol-Myers' 2014 guidance is as follows:
Pipeline and upcoming milestones
Bristol-Myers' pipeline consists of the following candidates.
(Source: Investor presentation)
|Qtrly Rev Growth (yoy):||0.06||-0.06||N/A||0.01|
|PEG (5 yr expected):||2.28||-3.15||6.69||2.50|
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.
|Company||Insider buying / shares||Insider selling / shares|
Only Bristol-Myers has seen intensive insider selling during the last 30 days.
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.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in BMY over 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.