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Summary

  • Four insiders sold Baker Hughes stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • Three of these four insiders decreased their holdings by more than 10%.

Baker Hughes Incorporated (NYSE:BHI) supplies oilfield services, products, technology, and systems to the oil and natural gas industry worldwide.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Baker Hughes' insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Richard WilliamsVPApril 2141,007No21,064 shares + 11,162 options56.0%
Jay MartinVPApril 213,336No9,393 shares26.2%
Alan CrainSVPApril 213,000Yes78,130 shares3.7%
Peter RagaussCFOApril 110,000Yes90,476 shares10.0%

There have been 57,343 shares sold by insiders during the last 30 days. Alan Crain and Peter Ragauss sold shares pursuant to a 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 Baker Hughes' insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 201457,3430
March 201416,4190
February 201412,7000
January 20144,7540
December 201315,2920
November 201342,0120
October 201300
September 201300
August 20131,6450
July 201300
June 20133,6030
May 20133060
April 201300
March 201300
February 201333,2330
January 20136,8000

There have been 194,107 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of April 2014 has seen the most insider selling.

Financials

Baker Hughes reported the first-quarter financial results on April 17 with the following highlights:

Revenue$5.7 billion
Net income$328 million
Cash$1.2 billion
Debt$4.5 billion

Three of these four insiders sold their shares after these results.

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(Source: Earnings presentation)

Outlook

For the second quarter Baker Hughes expects earnings growth similar to the first quarter.

(click to enlarge)

(Source: Earnings presentation)

Competition

Baker Hughes' competitors include Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB), and Weatherford International (NYSE:WFT). Here is a table comparing these companies.

CompanyBHIHALSLBWFT
Market Cap:30.90B55.07B133.49B14.31B
Employees:59,00077,000123,00067,000
Qtrly Rev Growth (yoy):0.10N/A0.06-0.08
Revenue:22.86B29.40B45.94B15.26B
Gross Margin:0.170.150.220.19
EBITDA:3.77B6.04B12.36B2.05B
Operating Margin:0.090.140.190.04
Net Income:1.16B2.11B7.19B-345.00M
EPS:2.612.355.32-0.45
P/E:26.9827.5319.21N/A
PEG (5 yr expected):0.730.710.960.43
P/S:1.351.832.900.93
P/B:1.713.963.321.73
Insider Ownership:0.29%0.27%0.21%1.18%

Baker Hughes has the second-highest PEG ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
HAL0694,881
SLB0533,705
WFT05,000

Halliburton and Schlumberger have also seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Baker Hughes, and there have not been any insiders buying Baker Hughes during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Baker Hughes has an insider ownership of 0.29%.

Before going short Baker Hughes, I would like to get a bearish confirmation from the Point & Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.

Source: Baker Hughes: 4 Different Insiders Have Sold Shares This Month