Baker Hughes: 4 Different Insiders Have Sold Shares This Month

Apr.24.14 | About: Baker Hughes (BHI)

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.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Richard Williams VP April 21 41,007 No 21,064 shares + 11,162 options 56.0%
Jay Martin VP April 21 3,336 No 9,393 shares 26.2%
Alan Crain SVP April 21 3,000 Yes 78,130 shares 3.7%
Peter Ragauss CFO April 1 10,000 Yes 90,476 shares 10.0%
Click to enlarge

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.

Month Insider selling / shares Insider buying / shares
April 2014 57,343 0
March 2014 16,419 0
February 2014 12,700 0
January 2014 4,754 0
December 2013 15,292 0
November 2013 42,012 0
October 2013 0 0
September 2013 0 0
August 2013 1,645 0
July 2013 0 0
June 2013 3,603 0
May 2013 306 0
April 2013 0 0
March 2013 0 0
February 2013 33,233 0
January 2013 6,800 0
Click to enlarge

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
Click to enlarge

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

Click to enlarge

(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.

Company BHI HAL SLB WFT
Market Cap: 30.90B 55.07B 133.49B 14.31B
Employees: 59,000 77,000 123,000 67,000
Qtrly Rev Growth (yoy): 0.10 N/A 0.06 -0.08
Revenue: 22.86B 29.40B 45.94B 15.26B
Gross Margin: 0.17 0.15 0.22 0.19
EBITDA: 3.77B 6.04B 12.36B 2.05B
Operating Margin: 0.09 0.14 0.19 0.04
Net Income: 1.16B 2.11B 7.19B -345.00M
EPS: 2.61 2.35 5.32 -0.45
P/E: 26.98 27.53 19.21 N/A
PEG (5 yr expected): 0.73 0.71 0.96 0.43
P/S: 1.35 1.83 2.90 0.93
P/B: 1.71 3.96 3.32 1.73
Insider Ownership: 0.29% 0.27% 0.21% 1.18%
Click to enlarge

Baker Hughes has the second-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
HAL 0 694,881
SLB 0 533,705
WFT 0 5,000
Click to enlarge

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.

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.