DuPont: 3 Different Insiders Have Sold Shares During The Last 30 Days

Mar. 2.14 | About: E. I. (DD)

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%.

E. I. du Pont de Nemours and Company (NYSE:DD) is a science and engineering company that offers products and patents applications for agriculture, nutrition, electronics and communications, safety and protection, home and construction, transportation and apparel.

Click to enlarge

Insider selling during the last 30 days

Here is a table of DuPont's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Mark Vergnano EVP Feb 25 66,253 No 117,040 shares 36.1%
Thomas Sager SVP Feb 10-25 28,232 Yes and No 46,782 shares 37.6%
Benito Cachinero SVP Feb 10 1,988 No 59,714 shares 3.2%
Click to enlarge

There have been 96,473 shares sold by insiders during the last 30 days. Thomas Sager sold 23,972 shares pursuant to a Rule 10b5-1 plan. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of DuPont's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
February 2014 96,473 0
January 2014 672 0
December 2013 55,000 0
November 2013 0 0
October 2013 0 0
September 2013 70,692 0
August 2013 190,522 0
July 2013 107,463 0
June 2013 0 0
May 2013 264,626 0
April 2013 313,865 0
March 2013 0 0
February 2013 22,675 0
January 2013 161,699 0
Click to enlarge

There have been 1,283,687 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

DuPont reported the full-year 2013 financial results on January 28 with the following highlights:

Net sales $35.7 billion
Net income (from continuing operations) $2.9 billion
Cash $9.1 billion
Debt $12.5 billion
Click to enlarge

Click to enlarge

(Source: Earnings presentation)

Outlook

DuPont's 2014 guidance is as follows:

Revenue ~$37 billion
EPS $4.20-$4.45
Click to enlarge

Click to enlarge

(Source: Earnings presentation)

Competition

DuPont's competitors include BASF (OTCQX:BASFY), and The Dow Chemical Company (NYSE:DOW). Here is a table comparing these companies.

Company DD BASFY DOW
Market Cap: 61.80B 104.95B 58.71B
Employees: 64,000 112,617 52,731
Qtrly Rev Growth (yoy): 0.05 0.02 0.03
Revenue: 35.94B 95.56B 57.08B
Gross Margin: 0.37 0.25 0.17
EBITDA: 5.87B 12.75B 7.20B
Operating Margin: 0.12 0.09 0.08
Net Income: 2.84B 6.06B 4.41B
EPS: 5.18 6.60 3.68
P/E: 12.86 17.31 13.24
PEG (5 yr expected): 1.91 8.94 1.46
P/S: 1.70 1.08 1.02
Click to enlarge

DuPont has the highest P/S ratio among these three companies.

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

Company Insider buying / shares Insider selling / shares
BASFY N/A N/A
DOW 0 822,890
Click to enlarge

Dow Chemical has also seen intensive insider selling during the last 30 days.

Conclusion

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

Before going short DuPont, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are 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.