General Dynamics: 6 Different Insiders Have Sold Shares During The Last 30 Days

| About: General Dynamics (GD)

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%.

General Dynamics Corporation (NYSE:GD) provides business aviation; combat vehicles, weapons systems, and munitions; military and commercial shipbuilding; and communications and information technology products and services worldwide.

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Insider selling during the last 30 days

Here is a table of General Dynamics' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Kimberly Kuryea VP Feb 20 7,676 No 25,160 shares + 1,360 options 22.4%
Mark Roualet EVP Feb 19 32,502 No 92,971 shares 25.9%
Daniel Johnson VP Feb 18 78,480 No 46,902 shares 62.6%
Larry Flynn VP Feb 6 65,115 No 57,038 shares + 19,555 options 46.0%
Gregory Gallopoulos SVP Jan 30 34,178 No 84,455 shares 28.8%
Robert Walmsley Director Jan 27 4,456 No 13,311 shares 25.1%
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There have been 222,407 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of General Dynamics' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 183,773 0
January 2014 87,762 0
December 2013 26,925 0
November 2013 101,203 0
October 2013 0 0
September 2013 209,801 0
August 2013 16,464 0
July 2013 64,484 0
June 2013 0 0
May 2013 543,977 0
April 2013 177,537 0
March 2013 0 0
February 2013 0 5,000
January 2013 0 0
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There have been 1,351,926 shares sold, and there have been 5,000 shares purchased by insiders since January 2013.

Financials

General Dynamics reported the full-year 2013 financial results on January 22 with the following highlights:

Revenue $31.2 billion
Net income $2.4 billion
Cash $5.3 billion
Debt $3.9 billion
Backlog $46 billion
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GD Revenue (<a href=

General Dynamics' revenues peaked two years ago.

Outlook

General Dynamics' 2014 guidance is as follows:

Revenue ~$30 billion
EPS $6.80-$6.85
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Competition

General Dynamics' competitors include Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), and Textron (NYSE:TXT). Here is a table comparing these companies.

Company GD BA LMT TXT
Market Cap: 38.14B 95.62B 52.57B 11.04B
Employees: 96,000 168,400 115,000 32,000
Qtrly Rev Growth (yoy): 0.00 0.07 -0.05 0.04
Revenue: 31.22B 86.62B 45.36B 12.10B
Gross Margin: 0.18 0.15 0.10 0.16
EBITDA: 4.24B 8.17B 5.34B 1.21B
Operating Margin: 0.12 0.07 0.10 0.07
Net Income: 2.49B 4.58B 2.95B 498.00M
EPS: 6.67 5.96 9.14 1.75
P/E: 16.29 21.57 18.03 22.32
PEG (5 yr expected): 1.85 1.67 2.18 1.07
P/S: 1.22 1.11 1.17 0.91
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General Dynamics has the highest P/S ratio among these four companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
BA 0 48,868
LMT 0 98,228
TXT 0 0
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Lockheed Martin has also seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling General Dynamics, and there have not been any insiders buying General Dynamics during the last 30 days. All six of these insiders decreased their holdings by more than 10%. General Dynamics has an insider ownership of 0.60%.

Before going short General Dynamics, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are relatively high P/S ratio, weak revenue growth, 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.