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:
- 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%.
United Technologies Corporation (NYSE:UTX) provides technology products and services to the building systems and aerospace industries worldwide.
Insider selling during the last 30 days
Here is a table of United Technologies' insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Elizabeth Amato||SVP||Feb 26||7,150||No||29,478 shares + 7,150 options||16.3%|
|Paul Adams||COO||Feb 26||7,300||No||6,770 shares||51.9%|
|Gregory Hayes||CFO||Feb 12-25||65,926||No||66,887 shares||49.6%|
|Michael Maurer||President, Sikorsky Aircraft||Feb 25||11,300||No||17,100 shares||39.8%|
|Charles Gill||SVP||Feb 24||10,000||No||27,981 shares||26.3%|
There have been 101,676 shares sold by insiders during the last 30 days.
Insider selling by calendar month
Here is a table of United Technologies' insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 678,923 shares sold, and there have been zero shares purchased by insiders since January 2013.
United Technologies reported the full-year 2013 financial results on January 22 with the following highlights:
|Net income||$5.7 billion|
United Technologies' 2014 guidance is as follows:
(Source: Earnings presentation)
|Qtrly Rev Growth (yoy):||0.02||0.07||0.04|
|PEG (5 yr expected):||1.52||1.68||1.77|
United Technologies has the second-highest P/S ratio among these three companies.
Here is a table of these competitors' insider activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Boeing has also seen intensive insider selling during the last 30 days.
There have been five different insiders selling United Technologies, and there have not been any insiders buying United Technologies during the last 30 days. All five of these insiders decreased their holdings by more than 10%. United Technologies has an insider ownership of 0.10%.
Before going short United Technologies, 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.