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.
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%|
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|
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.
Halliburton reported the first-quarter financial results on April 21 with the following highlights:
|Net income||$622 million|
Halliburton expects earnings per share to grow approximately 25% in the second quarter, with further increases to follow.
|Qtrly Rev Growth (yoy):||0.04||0.10||0.06||-0.08|
|PEG (5 yr expected):||0.71||0.73||0.96||0.43|
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|
Baker Hughes and Schlumberger have also seen intensive insider selling during the last 30 days.
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.