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

Mar. 4.14 | About: PPG Industries, (PPG)

In this article, I will feature one specialty chemicals company 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%.

PPG Industries (NYSE:PPG) manufactures and distributes coatings, optical and specialty materials, and glass products.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Glenn Bost SVP Feb 26 8,889 No 19,308 shares 31.5%
Charles Bunch CEO Feb 14-18 140,000 No 348,681 shares 28.6%
David Navikas SVP Feb 14 2,500 No 16,310 shares 13.3%
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There have been 151,389 shares sold by insiders during the last 30 days.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
February 2014 151,389 0
January 2014 9,538 0
December 2013 0 0
November 2013 0 0
October 2013 145,340 0
September 2013 0 0
August 2013 84,545 0
July 2013 65,000 0
June 2013 0 0
May 2013 0 0
April 2013 6,810 0
March 2013 5,000 0
February 2013 12,000 0
January 2013 191,552 0
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There have been 671,174 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

PPG reported the full-year 2013 financial results on January 16 with the following highlights:

Revenue $15.1 billion
Net income (continuing operations) $1.0 billion
Cash $1.7 billion
Debt $3.4 billion
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Competition

PPG's competitors include Dow Chemical (NYSE:DOW), and DuPont (NYSE:DD). Here is a table comparing these companies.

Company PPG DOW DD
Market Cap: 27.66B 59.39B 62.05B
Employees: 41,400 52,731 64,000
Qtrly Rev Growth (yoy): 0.14 0.03 0.05
Revenue: 15.11B 57.08B 35.94B
Gross Margin: 0.43 0.17 0.37
EBITDA: 2.28B 7.20B 5.87B
Operating Margin: 0.12 0.08 0.12
Net Income: 1.03B 4.41B 2.84B
EPS: 7.21 3.68 5.18
P/E: 26.85 13.37 12.89
PEG (5 yr expected): 1.96 1.46 1.89
P/S: 1.81 1.02 1.70
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PPG has the 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
DOW 0 822,890
DD 0 228,675
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Dow Chemical, and DuPont have also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling PPG, and there have not been any insiders buying PPG during the last 30 days. All three of these insiders decreased their holdings by more than 10%. PPG has an insider ownership of 0.40%.

Before going short PPG, 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.