Deere & Company (NYSE:DE) manufactures and distributes agriculture and turf, and construction and forestry equipment worldwide.
Insider selling during the last 30 days
Here is a table of Deere & Company's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Jean Gilles||SVP||April 4-8||22,650||Yes||54,202 shares||29.5%|
|James Field||President, A&T||April 4||13,380||Yes||64,550 shares||17.2%|
|Samuel Allen||CEO||April 2-3||32,371||Yes||280,150 shares||10.4%|
There have been 68,401 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 Deere & Company's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 265,943 shares sold, and there have been zero shares purchased by insiders since January 2013.
Deere & Company reported the fiscal 2014 first-quarter, which ended January 31, financial results on February 12 with the following highlights:
|Net income||$681.1 million|
(Source: Earnings presentation)
The three insiders sold their shares after these results.
Company equipment sales are projected to decrease about 3 percent for fiscal 2014 and be down about 6 percent for the second quarter compared with the same periods of 2013. For the full year, net income attributable to Deere & Company is anticipated to be approximately $3.3 billion.
(Source: Earnings presentation)
|Qtrly Rev Growth (yoy):||0.03||0.06||-0.10||0.28|
|PEG (5 yr expected):||1.36||1.05||1.29||1.05|
Deere & Company has the highest PEG ratio among these four companies.
Here is a table of these competitors' insider activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only Deere & Company has seen intensive insider selling during the last 30 days.
There have been three different insiders selling Deere & Company, and there have not been any insiders buying Deere & Company during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Deere & Company has an insider ownership of 7.18%.
There are four analyst buy ratings, 11 neutral ratings, and eight sell ratings with an average price target of $87.95. Before going short Deere & Company, I would like to get a bearish confirmation from the Point & Figure chart. The four main reasons for the proposed short entry are a relatively high PEG ratio, bearish analyst price targets, weak revenue guidance, and the intensive insider-selling activity.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.