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Summary

  • Six insiders sold Sangamo BioSciences stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • Two of these six insiders decreased their holdings by more than 10%.

Sangamo BioSciences (NASDAQ:SGMO) focuses on the research, development, and commercialization of zinc finger DNA-binding proteins (ZFPs) for gene regulation and gene modification in the United States.

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Insider selling during the last 30 days

Here is a table of Sangamo BioSciences' insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Dale AndoVPMarch 2615,000Yes97,015 shares + 144,000 options5.9%
Philip GregorySVPMarch 2115,000Yes109,347 shares + 289,500 options3.6%
Saira RamasastryDirectorMarch 1710,000Yes0 shares + 40,000 options20.0%
Steven MentoDirectorMarch 146,103Yes23,563 shares20.6%
Edward LanphierCEOMarch 1750,000Yes1,986,054 shares2.5%
Ward WolffCFOMarch 1010,000Yes227,347 shares + 182,000 options2.4%

There have been 106,103 shares sold by insiders during the last 30 days. All these shares were sold pursuant to a Rule 10b5-1 plan.

SEC Rule 10b5-1 is a regulation enacted by the United States Securities and Exchange Commission (SEC) in 2000. The SEC states that Rule 10b5-1 was enacted in order to resolve an unsettled issue over the definition of insider trading, which is prohibited by SEC Rule 10b-5. After Rule 10b5-1 was enacted, the SEC staff publicly took the position that canceling a planned trade made under the safe harbor does not constitute insider trading, even if the person was aware of the inside information when canceling the trade. This staff interpretation raises the possibility that executives can exploit this safe harbor by entering into 10b5-1 trading plans before they have inside information while retaining the option to later cancel those plans based on inside information.

For example, a CEO of a company could call a broker on January 1 and enter into a plan to sell a particular quantity of shares of his company's stock on March 1, find out terrible news about his company on February 1 that will not become public until April 1, and then go forward with the March 1 sale anyway, saving himself from losing money when the bad news becomes public. Under the terms of Rule 10b5-1(b) this is insider trading because the CEO "was aware" of the inside information when he made the trade. But he can assert an affirmative defense under Rule 10b5-1(c), because he planned the trade before he learned the inside information.

In general, it is a safer way for an insider to sell shares pursuant to a Rule 10b5-1 trading plan than without it.

Insider selling by calendar month

Here is a table of Sangamo BioSciences' insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
March 2014106,1030
February 2014115,0000
January 201498,3330
December 2013100,0000
November 201365,0000
October 201375,0000
September 201372,2780
August 201365,0000
July 201373,0000
June 20133,0000
May 201321,0000
April 201336,1900
March 201321,0000
February 201356,0000
January 201339,6000

There have been 946,504 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of February 2014 has seen the most insider selling.

Financials

Sangamo BioSciences reported the full-year 2013 financial results on February 11 with the following highlights:

Revenue$24.1 million
Net loss$26.6 million
Cash$92.8 million

The six insiders sold their shares after these results.

On March 26, Sangamo BioSciences closed a $100 million financing.

Outlook

Sangamo BioSciences' 2014 guidance is as follows:

Revenue$45-$50 million
Operating expenses$65-$70 million

Pipeline and upcoming milestones

Sangamo BioSciences' pipeline consists of the following candidates.

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(Source: Sangamo BioSciences)

Sangamo BioSciences' upcoming milestones include the following.

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(Source: Investor presentation)

Competition

Sangamo BioSciences' competitors (according to the 2013 annual report) include Amgen (NASDAQ:AMGN), Bluebird Bio (NASDAQ:BLUE), and Isis Pharmaceuticals (NASDAQ:ISIS). Here is a table comparing these companies.

CompanySGMOAMGNBLUEISIS
Market Cap:1.05B91.02B539.45M4.66B
Employees:8520,00087365
Qtrly Rev Growth (yoy):-0.230.1373.531.13
Revenue:24.13M18.68B20.18M147.29M
Gross Margin:-0.530.821.00-0.21
EBITDA:-25.98M7.35B-24.01M-35.58M
Operating Margin:-1.100.32-1.24-0.31
Net Income:-26.62M5.08B-25.32M-60.64M
EPS:-0.486.64-2.02-0.55
P/E:N/A18.16N/AN/A
PEG (5 yr expected):N/A2.151.25-2.73
P/S:45.994.9426.9233.56
Insider Ownership:4.30%5.06%1.30%0.89%

Sangamo BioSciences has the second-highest insider ownership among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
AMGN021,000
BLUE0994,000
ISIS0207,861

Only Sangamo BioSciences has seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling Sangamo BioSciences, and there have not been any insiders buying Sangamo BioSciences during the last 30 days. Two of these six insiders decreased their holdings by more than 10%. Sangamo BioSciences has an insider ownership of 4.30%.

Sangamo BioSciences has a $9 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $9 price target. I would place a stop loss at $25, which is the 13-year high. The two main reasons for the proposed short entry are a bearish Point & Figure chart, and the intensive insider-selling activity.

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Source: Sangamo BioSciences: 6 Different Insiders Have Sold Shares This Month