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Summary

  • Five insiders have sold Hormel Foods stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • Three of these five insiders decreased their holdings by more than 10%.

Hormel Foods Corporation (NYSE:HRL) processes, markets, and sells consumer-branded meat and food products.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Hormel Foods' insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Dakota PippinsDirectorApril 93,128No47,870 shares6.1%
James SplinterGroup VPApril 29,185No44,153 shares + 12,000 options14.1%
James SneeGroup VPMarch 313,194No25,542 shares11.1%
Larry VorpahlGroup VPMarch 28-317,000No112,720 shares5.8%
David JuhlkeVPMarch 1721,920No31,527 shares41.0%

There have been 44,427 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Hormel Foods' insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 201412,3130
March 201433,7930
February 20149,9680
January 20141,7250
December 201324,3770
November 201300
October 201300
September 201300
August 201300
July 2013520
June 201300
May 201300
April 201300
March 201320,0000
February 201300
January 201333,9470

There have been 136,175 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Hormel Foods reported the fiscal 2014 first-quarter, which ended January 26, financial results on February 20 with the following highlights:

Revenue$2.2 billion
Net income$153.3 million
Cash$639.8 million
Debt$250.0 million

The five insiders sold their shares after these results.

Outlook

Hormel Foods' 2014 earnings per share guidance range is $2.17 to $2.27.

Competition

Hormel Foods' competitors include Tyson Foods (NYSE:TSN), ConAgra Foods (NYSE:CAG), and General Mills (NYSE:GIS). Here is a table comparing these companies.

CompanyHRLTSNCAGGIS
Market Cap:12.46B14.31B12.90B31.43B
Employees:19,700115,00034,84041,000
Qtrly Rev Growth (yoy):0.060.050.15-0.01
Revenue:8.88B34.77B17.90B18.04B
Gross Margin:0.170.070.210.36
EBITDA:964.03M2.00B2.30B3.50B
Operating Margin:0.090.040.100.16
Net Income:549.84M925.00M809.70M1.79B
EPS:2.042.351.922.73
P/E:23.1317.8715.9618.76
PEG (5 yr expected):1.892.051.862.49
P/S:1.400.410.721.74

Hormel Foods has the highest P/E ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
TSN0368,205
CAG3,30038,000
GIS0197,113

General Mills has also seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling Hormel Foods, and there have not been any insiders buying Hormel Foods during the last 30 days. Three of these five insiders decreased their holdings by more than 10%. Hormel Foods has an insider ownership of 49.03%.

Before going short Hormel Foods, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are a relatively high P/E ratio, and the intensive insider-selling activity.

Source: Hormel Foods: 5 Different Insiders Have Sold Shares During The Last 30 Days