- Six insiders sold Costco stock within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- Three of these six insiders decreased their holdings by more than 10%.
Costco Wholesale Corporation (NASDAQ:COST) is engaged in the operation of membership warehouses in the United States and Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Australia, and through majority-owned subsidiaries in Taiwan and Korea.
Insider selling during the last 30 days
Here is a table of Costco's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Richard Galanti||CFO||March 14||15,164||No||57,168 shares + 23,000 options||15.9%|
|James Sinegal||Director||March 14||4,000||Yes||1,711,462 shares||0.2%|
|Craig Jelinek||CEO||March 14||41,444||No||237,228 shares||14.9%|
|John McKay||EVP||March 14||3,000||No||65,941 shares||4.4%|
|Timothy Rose||EVP||March 12||5,000||No||36,579 shares||12.0%|
|Franz Lazarus||EVP||March 3||600||Yes||52,615 shares||1.1%|
There have been 69,208 shares sold by insiders during the last 30 days. James Sinegal and Franz Lazarus sold 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 Costco's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 442,277 shares sold, and there have been zero shares purchased by insiders since January 2013.
Costco reported the fiscal 2014 second-quarter, which ended February 16, financial results on March 6 with the following highlights:
|Net income||$463 million|
(Source: Earnings presentation)
Costco has a negative EPS growth currently.
|Qtrly Rev Growth (yoy):||0.06||-0.05||0.01|
|PEG (5 yr expected):||2.26||1.27||1.68|
Costco has the highest P/E ratio among these three companies.
Here is a table of these competitors' insider activities during the last six months.
|Company||Insider buying / shares||Insider selling / shares|
Only Costco has seen intensive insider selling during the last 30 days.
There have been six different insiders selling Costco, and there have not been any insiders buying Costco during the last 30 days. Three of these six insiders decreased their holdings by more than 10%. Costco has an insider ownership of 0.60%.
Before going short Costco, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are relatively high P/E ratio, and the intensive insider-selling activity.