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:
- 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%.
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.
|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%|
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|
There have been 671,174 shares sold, and there have been zero shares purchased by insiders since January 2013.
PPG reported the full-year 2013 financial results on January 16 with the following highlights:
|Net income (continuing operations)||$1.0 billion|
|Qtrly Rev Growth (yoy):||0.14||0.03||0.05|
|PEG (5 yr expected):||1.96||1.46||1.89|
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|
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.