Restoration Hardware Holdings (NYSE:RH) is engaged in the retail of home furnishings.
Insider selling during the last 30 days
Here is a table of Restoration Hardware's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Eri Chaya||Director||April 3||14,000||No||44,045 shares||24.1%|
|Carlos Alberini||Director||April 2||350,000||No||1,032,855 shares||25.3%|
|Thomas Mottola||Director||April 2||160,000||No||170,568 shares||48.4%|
|Kenneth Dunaj||COO||Mar 28-Apr 1||53,900||Yes||55,280 shares + 71,700 options||29.8%|
There have been 577,900 shares sold by insiders during the last 30 days. Kenneth Dunaj sold shares pursuant to the 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 Restoration Hardware's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 23,577,178 shares sold, and there have been 123,275 shares purchased by insiders since January 2013.
Restoration Hardware reported the fiscal 2013 full-year, which ended February 1, financial results on March 27 with the following highlights:
|Net income||$18.2 million|
The four insiders sold their shares after these results.
Restoration Hardware's guidance is as follows:
|Revenue||$345-$350 million||$1.825-$1.860 billion|
|Adjusted net income||$3.7-$4.5 million||$87.6-$90.9 million|
The company will be cash flow negative this year.
|Qtrly Rev Growth (yoy):||0.19||0.04||-0.06||-0.07|
|PEG (5 yr expected):||1.11||1.51||1.33||1.15|
Restoration Hardware has the highest P/S ratio among these four companies.
Here is a table of these competitors' insider activities this year.
|Company||Insider buying/shares||Insider selling/shares|
Williams-Sonoma has also seen intensive insider selling during the last 30 days.
There have been four different insiders selling Restoration Hardware, and there have not been any insiders buying Restoration Hardware during the last 30 days. All four of these insiders decreased their holdings by more than 10%. Restoration Hardware has an insider ownership of 57.03%.
Before going short Restoration Hardware, I would like to get a bearish confirmation from the Point & Figure chart. The three main reasons for the proposed short entry are a relatively high P/S ratio, negative cash flow, 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.