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Summary

  • Three insiders sold Dish Network stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • All three of these insiders decreased their holdings by more than 10%.

Dish Network Corporation (NASDAQ:DISH) provides pay-television services in the United States.

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Insider selling during the last 30 days

Here is a table of Dish Network's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
David Shull EVP April 15 10,000 Yes 1,132 shares + 25,000 options 27.7%
Stanton Dodge EVP March 31 20,000 Yes 3,280 shares + 40,000 options 31.6%
Michael McClaskey EVP March 31 3,000 Yes 1,756 shares + 6,000 options 27.9%

There have been 33,000 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 Dish Network's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
April 2014 10,000 0
March 2014 27,000 0
February 2014 52,000 0
January 2014 10,000 0
December 2013 175,000 0
November 2013 78,000 0
October 2013 4,180 0
September 2013 4,000 0
August 2013 828,487 0
July 2013 72,462 0
June 2013 259,000 0
May 2013 160,750 0
April 2013 399,180 0
March 2013 109,000 0
February 2013 50,748 0
January 2013 4,210 0

There have been 2,244,017 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Dish Network reported the full-year 2013 financial results on February 21 with the following highlights:

Revenue $13.9 billion
Net income $807.5 million
Cash $9.7 billion
Debt $13.7 billion

The three insiders sold their shares after these results.

Competition

Dish Network's competitors include Comcast Corporation (NASDAQ:CMCSA), DirecTV (NASDAQ:DTV), and Time Warner Cable (NYSE:TWC). Here is a table comparing these companies.

Company DISH CMCSA DTV TWC
Market Cap: 27.26B 127.98B 38.54B 37.55B
Employees: 25,000 136,000 28,200 51,200
Qtrly Rev Growth (yoy): -0.01 0.06 0.07 0.02
Revenue: 13.90B 64.66B 31.75B 22.12B
Gross Margin: 0.37 0.70 0.48 0.53
EBITDA: 2.88B 21.43B 7.81B 7.72B
Operating Margin: 0.13 0.21 0.17 0.21
Net Income: 807.49M 6.82B 2.86B 1.94B
EPS: 1.76 2.56 5.17 6.70
P/E: 33.85 19.18 14.57 20.20
PEG (5 yr expected): 2.08 0.99 1.28 1.34
P/S: 1.94 1.98 1.22 1.70

Dish Network has the highest P/E ratio among these four companies.

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

Company Insider buying / shares Insider selling / shares
CMCSA 0 684,526
DTV 0 60,756
TWC 0 602,772

Comcast and Time Warner Cable have also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Dish Network, and there have not been any insiders buying Dish Network during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Dish Network has an insider ownership of 3.21%.

Dish Network has a $49 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $49 price target. I would place a stop loss at $65, which is the all-time high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, relatively high P/E ratio, and the intensive insider-selling activity.

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Source: Dish Network: 3 Different Insiders Have Sold Shares During The Last 30 Days