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Summary

  • Six insiders sold Aecom Technology 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%.

Aecom Technology (NYSE:ACM) is a provider of professional technical and management support services for public and private clients around the world.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Aecom Technology's insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Ronald OsborneSVPApril 158,000Yes26,313 shares23.3%
Frederick WernerPresident, EMEAApril 416,286Yes192,429 shares + 49,636 options6.3%
John DionisioExecutive ChairmanApril 120,000Yes694,141 shares + 247,713 options2.1%
Richard NewmanDirectorApril 1-244,690Yes500,474 shares + 93,104 options7.0%
Jane ChmielinskiCOOMarch 24-2590,850Yes124,737 shares42.1%
William OuchiDirectorMarch 184,885Yes66,649 shares + 20,116 options5.3%

There have been 184,711 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 Aecom Technology's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 201488,9760
March 2014170,7350
February 201450,8000
January 201456,9860
December 201310,0000
November 201340,0000
October 201347,2850
September 201356,2000
August 2013125,0000
July 2013262,0000
June 2013128,2000
May 2013140,0000
April 201340,0000
March 2013265,0000
February 201377,3810
January 201392,1030

There have been 1,650,666 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Aecom Technology reported the fiscal 2014 first-quarter, which ended December 31, financial results on February 4 with the following highlights:

Revenue$2.0 billion
Net income$56.4 million
Cash$681.7 million
Debt$1.2 billion

The six insiders sold their shares after these results.

(click to enlarge)

(Source: Earnings presentation)

Outlook

Aecom Technology's fiscal 2014 EPS guidance is $2.50 to $2.60.

(click to enlarge)

(Source: Earnings presentation)

Competition

Aecom Technology's competitors include Jacobs Engineering (NYSE:JEC), Fluor Corporation (NYSE:FLR), and Foster Wheeler AG (FWLT). Here is a table comparing these companies.

CompanyACMJECFLRFWLT
Market Cap:3.22B8.41B12.49B3.33B
Employees:44,40049,40038,12913,311
Qtrly Rev Growth (yoy):-0.030.11-0.100.17
Revenue:8.09B12.13B27.35B3.31B
Gross Margin:0.060.150.050.17
EBITDA:453.51M763.91M1.40B243.70M
Operating Margin:0.050.050.040.06
Net Income:257.53M417.82M667.71M96.90M
EPS:2.583.184.060.96
P/E:12.5820.0519.1814.52
PEG (5 yr expected):1.761.211.261.03
P/S:0.400.690.451.00

Aecom Technology has the highest PEG ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
JEC10,00072,094
FLR035,530
FWLT0295,012

Only Aecom Technology has seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling Aecom Technology, and there have not been any insiders buying Aecom Technology during the last 30 days. Two of these six insiders decreased their holdings by more than 10%. Aecom Technology has an insider ownership of 12.73%.

Before going short Aecom Technology, 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 PEG ratio, negative revenue growth, 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.

Source: Aecom Technology: 6 Different Insiders Have Sold Shares During The Last 30 Days