Aecom Technology (NYSE:ACM) is a provider of professional technical and management support services for public and private clients around the world.
Insider selling during the last 30 days
Here is a table of Aecom Technology's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Ronald Osborne||SVP||April 15||8,000||Yes||26,313 shares||23.3%|
|Frederick Werner||President, EMEA||April 4||16,286||Yes||192,429 shares + 49,636 options||6.3%|
|John Dionisio||Executive Chairman||April 1||20,000||Yes||694,141 shares + 247,713 options||2.1%|
|Richard Newman||Director||April 1-2||44,690||Yes||500,474 shares + 93,104 options||7.0%|
|Jane Chmielinski||COO||March 24-25||90,850||Yes||124,737 shares||42.1%|
|William Ouchi||Director||March 18||4,885||Yes||66,649 shares + 20,116 options||5.3%|
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.
|Month||Insider selling / shares||Insider buying / shares|
There have been 1,650,666 shares sold, and there have been zero shares purchased by insiders since January 2013.
Aecom Technology reported the fiscal 2014 first-quarter, which ended December 31, financial results on February 4 with the following highlights:
|Net income||$56.4 million|
The six insiders sold their shares after these results.
(Source: Earnings presentation)
Aecom Technology's fiscal 2014 EPS guidance is $2.50 to $2.60.
(Source: Earnings presentation)
|Qtrly Rev Growth (yoy):||-0.03||0.11||-0.10||0.17|
|PEG (5 yr expected):||1.76||1.21||1.26||1.03|
Aecom Technology 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 Aecom Technology has seen intensive insider selling during the last 30 days.
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.