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In this article, I will feature one grocery store 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%.

Whole Foods Market (NASDAQ:WFM) operates as a retailer of natural and organic foods.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Whole Foods Market's insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Scott AllshouseRegional PresidentFeb 21-2435,960No8,277 shares81.3%
Patrick BradleyRegional PresidentFeb 213,500No5,344 shares + 4,500 options26.2%
Shahid HassanDirectorFeb 185,813No34,645 shares14.4%

There have been 45,273 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Whole Foods Market's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 201445,2730
January 201400
December 201312,3000
November 2013141,3800
October 201300
September 201300
August 2013184,6420
July 201300
June 201322,4580
May 2013412,5040
April 201300
March 2013100,0002,939
February 201316,4710
January 201300

(Whole Foods Market had a two-for-one stock split on May 29, 2013)

There have been 935,028 shares sold, and there have been 2,939 shares purchased by insiders since January 2013.

Financials

Whole Foods Market reported the fiscal 2014 first-quarter, which ended January 19, financial results on February 12 with the following highlights:

Revenue$4.2 billion
Net income$158 million
Cash$1.0 billion
Debt$32.0 million

Whole Foods Market's revenue growth has been slowing down since 2012.

Outlook

Whole Foods Market's fiscal 2014 guidance is as follows:

Sales growth11%-12%
Comparable store sales growth5.5%-6.2%
EPS$1.58-$1.65

Competition

Whole Foods Market's competitors include The Kroger Co. (NYSE:KR), and Sprouts Farmers Market (NASDAQ:SFM). Here is a table comparing these companies.

CompanyWFMKRSFM
Market Cap:19.80B20.68B5.43B
Employees:80,000343,00014,200
Qtrly Rev Growth (yoy):0.100.030.24
Revenue:13.30B99.42B2.31B
Gross Margin:0.360.210.30
EBITDA:1.26B4.54B197.94M
Operating Margin:0.070.030.07
Net Income:563.00M1.55B45.39M
EPS:1.502.980.30
P/E:35.5113.44123.56
PEG (5 yr expected):1.921.782.95
P/S:1.500.212.30

Whole Foods Market has the second-highest P/S ratio among these three companies.

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

CompanyInsider buying / sharesInsider selling / shares
KR05,000
SFM0102,977

Only Whole Foods Market has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Whole Foods Market, and there have not been any insiders buying Whole Foods Market during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Whole Foods Market has an insider ownership of 0.50%.

Whole Foods Market has a $42 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $42 price target. I would place a stop loss at $65, which is the all-time high. The two main reasons for the proposed short entry are bearish Point and Figure chart, and the intensive insider-selling activity.

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Source: Whole Foods Market: 3 Different Insiders Have Sold Shares This Month