Sprouts Farmers Market: 9 Different Insiders Have Sold Shares During The Last 30 Days

Apr. 6.14 | About: Sprouts Farmers (SFM)

Summary

Nine insiders sold Sprouts Farmers Market stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

All nine of these insiders decreased their holdings by more than 10%.

Sprouts Farmers Market (NASDAQ:SFM) is engaged in the retail of natural and organic food in the United States.

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Insider selling during the last 30 days

Here is a table of Sprouts Farmers Market's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Secondary Public Offering Current Ownership Decrease In Ownership
Apollo Management Holdings 10% Owner April 2 9,408,458 Yes 45,633,699 shares 17.1%
George Golleher Director March 28 46,988 Yes 225,000 shares + 39,970 options 15.1%
Shon Boney Insider March 28 317,377 Yes 0 shares + 324,290 options 49.5%
Donna Berlinski Controller March 28 18,803 Yes 7,764 shares + 26,114 options 35.7%
Steve Black CMO March 28 24,597 Yes 2,442 shares + 61,341 options 27.8%
Brandon Lombardi CLO March 28 45,906 Yes 9,942 shares + 119,533 options 26.2%
Jim Nielsen COO March 28 95,213 Yes 7,659 shares + 65,204 options 56.6%
Amin Maredia CFO March 28 52,800 Yes 216,659 shares + 148,867 options 12.6%
Doug Sanders CEO March 28 384,022 Yes 135,449 shares + 337,854 options 44.8%
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There have been 10,394,164 shares sold by insiders during the last 30 days. All these shares were sold pursuant to a secondary public offering.

Insider selling by calendar month

Here is a table of Sprouts Farmers Market's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
April 2014 9,408,458 0
March 2014 985,706 0
February 2014 135,216 0
January 2014 0 0
December 2013 10,175,612 0
November 2013 948,948 0
October 2013 0 0
September 2013 0 0
August 2013 0 427,300
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There have been 21,653,940 shares sold, and there have been 427,300 shares purchased by insiders since August 2013. Sprouts Farmers Market had its IPO in August 2013.

Financials

Sprouts Farmers Market reported the full-year 2013 financial results on February 27 with the following highlights:

Revenue $2.4 billion
Net income $51.3 million
Cash $77.7 million
Debt $430.8 million
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The nine insiders sold their shares after these results.

Outlook

Sprouts Farmers Market's first-quarter guidance is as follows:

Net sales ~$720.0 million
Comparable store sales growth ~12.5%
Gross margin 30.5%-31.0%
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Sprouts Farmers Market's full-year 2014 guidance is as follows:

Net sales growth 16%-18%
Comparable store sales growth 7%-8%
Adjusted EPS $0.58-$0.60
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News

On April 4, Sprouts Farmers Market announced that it is recalling Organic Black Peppercorns sold under the Sprouts brand name from all stores. This product has the potential to be contaminated with Salmonella, an organism that can cause serious and sometimes fatal infections in young children, the elderly, and others with weakened immune systems.

Competition

Sprouts Farmers Market's competitors include Natural Grocers by Vitamin Cottage (NYSE:NGVC), and Whole Foods Market (NASDAQ:WFM). Here is a table comparing these companies.

Company SFM NGVC WFM
Market Cap: 5.42B 917.76M 19.01B
Employees: 14,000 1,648 56,700
Qtrly Rev Growth (yoy): 0.27 0.26 0.10
Revenue: 2.44B 455.40M 13.30B
Gross Margin: 0.30 0.29 0.36
EBITDA: 189.09M 34.88M 1.26B
Operating Margin: 0.06 0.05 0.07
Net Income: 51.33M 11.25M 563.00M
EPS: 0.37 0.50 1.50
P/E: 99.14 81.68 34.07
PEG (5 yr expected): 2.51 2.26 1.91
P/S: 2.32 2.08 1.46
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Sprouts Farmers Market 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
NGVC 0 42,439
WFM 0 89,977
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Only Sprouts Farmers Market has seen intensive insider selling during the last 30 days.

Conclusion

There have been nine different insiders selling Sprouts Farmers Market, and there have not been any insiders buying Sprouts Farmers Market during the last 30 days. All nine of these insiders decreased their holdings by more than 10%. Sprouts Farmers Market has an insider ownership of 0.50%.

Sprouts Farmers Market has a $23 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $23 price target. I would place a stop loss at $40, which is the three-month high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, relatively high P/S ratio, and the intensive insider-selling activity.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in SFM over 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.