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Summary

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

Halliburton Company (NYSE:HAL) provides a range of services and products for the exploration, development, and production of oil and natural gas to oil and gas companies worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Mark McCollumCFOApril 213,177Yes126,714 shares + 204,900 options0.9%
Jeffrey MillerCOOApril 2-2139,634Yes223,671 shares + 114,799 options10.5%
David LesarCEOMar 25-Apr 21234,476Yes576,371 shares + 835,800 options14.2%
Lawrence PopeEVPApril 153,000Yes161,937 shares + 165,200 options0.9%
Timothy ProbertSA to CEOApril 1418,700Yes165,564 shares + 210,300 options4.7%
Evelyn AngelleSVPApril 434,279Yes20,092 shares + 19,000 options46.7%
James BrownPresident, WHApril 215,000Yes308,774 shares + 232,200 options2.7%
Joe RaineyPresident, EHApril 1-224,269Yes175,950 shares + 97,999 options8.1%

There have been 372,535 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 Halliburton's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 2014301,5350
March 2014217,5860
February 2014172,7600
January 20143,0000
December 201351,5790
November 201378,5960
October 201379,1880
September 2013179,8630
August 2013243,4390
July 201383,6060
June 20137,0000
May 2013159,3610
April 20137,0000
March 201317,6670
February 2013121,5600
January 201393,4680

There have been 1,817,208 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

Halliburton reported the first-quarter financial results on April 21 with the following highlights:

Revenue$7.3 billion
Net income$622 million
Cash$2.4 billion
Debt$7.8 billion

Outlook

Halliburton expects earnings per share to grow approximately 25% in the second quarter, with further increases to follow.

Competition

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

CompanyHALBHISLBWFT
Market Cap:55.07B30.90B133.49B14.31B
Employees:77,00059,000123,00067,000
Qtrly Rev Growth (yoy):0.040.100.06-0.08
Revenue:29.40B22.86B45.94B15.26B
Gross Margin:0.150.170.220.19
EBITDA:6.04B3.77B12.36B2.05B
Operating Margin:0.140.090.190.04
Net Income:2.11B1.16B7.19B-345.00M
EPS:2.352.615.32-0.45
P/E:27.5326.9819.21N/A
PEG (5 yr expected):0.710.730.960.43
P/S:1.831.352.900.93
P/B:3.961.713.321.73
Insider Ownership:0.27%0.29%0.21%1.18%

Halliburton has the highest P/B ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
BHI091,216
SLB0533,705
WFT05,000

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

Conclusion

There have been eight different insiders selling Halliburton, and there have not been any insiders buying Halliburton during the last 30 days. Three of these eight insiders decreased their holdings by more than 10%. Halliburton has an insider ownership of 0.27%.

Before going short Halliburton, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are a relatively high P/B ratio, and the intensive insider-selling activity.

Source: Halliburton: 8 Different Insiders Have Sold Shares During The Last 30 Days