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

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 |  About: Halliburton Company (HAL), Includes: BHI, SLB, WFT
by: Markus Aarnio

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.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Mark McCollum CFO April 21 3,177 Yes 126,714 shares + 204,900 options 0.9%
Jeffrey Miller COO April 2-21 39,634 Yes 223,671 shares + 114,799 options 10.5%
David Lesar CEO Mar 25-Apr 21 234,476 Yes 576,371 shares + 835,800 options 14.2%
Lawrence Pope EVP April 15 3,000 Yes 161,937 shares + 165,200 options 0.9%
Timothy Probert SA to CEO April 14 18,700 Yes 165,564 shares + 210,300 options 4.7%
Evelyn Angelle SVP April 4 34,279 Yes 20,092 shares + 19,000 options 46.7%
James Brown President, WH April 2 15,000 Yes 308,774 shares + 232,200 options 2.7%
Joe Rainey President, EH April 1-2 24,269 Yes 175,950 shares + 97,999 options 8.1%
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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.

Month Insider selling / shares Insider buying / shares
April 2014 301,535 0
March 2014 217,586 0
February 2014 172,760 0
January 2014 3,000 0
December 2013 51,579 0
November 2013 78,596 0
October 2013 79,188 0
September 2013 179,863 0
August 2013 243,439 0
July 2013 83,606 0
June 2013 7,000 0
May 2013 159,361 0
April 2013 7,000 0
March 2013 17,667 0
February 2013 121,560 0
January 2013 93,468 0
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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
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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.

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

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

Company Insider buying / shares Insider selling / shares
BHI 0 91,216
SLB 0 533,705
WFT 0 5,000
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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.

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.