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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.

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Glenn BostSVPFeb 268,889No19,308 shares31.5%
Charles BunchCEOFeb 14-18140,000No348,681 shares28.6%
David NavikasSVPFeb 142,500No16,310 shares13.3%

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.

MonthInsider selling / sharesInsider buying / shares
February 2014151,3890
January 20149,5380
December 201300
November 201300
October 2013145,3400
September 201300
August 201384,5450
July 201365,0000
June 201300
May 201300
April 20136,8100
March 20135,0000
February 201312,0000
January 2013191,5520

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

Competition

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

CompanyPPGDOWDD
Market Cap:27.66B59.39B62.05B
Employees:41,40052,73164,000
Qtrly Rev Growth (yoy):0.140.030.05
Revenue:15.11B57.08B35.94B
Gross Margin:0.430.170.37
EBITDA:2.28B7.20B5.87B
Operating Margin:0.120.080.12
Net Income:1.03B4.41B2.84B
EPS:7.213.685.18
P/E:26.8513.3712.89
PEG (5 yr expected):1.961.461.89
P/S:1.811.021.70

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

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

CompanyInsider buying / sharesInsider selling / shares
DOW0822,890
DD0228,675

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.

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