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Summary

  • 3 insiders sold Baxter's stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • All 3 of these insiders decreased their holdings by more than 10%.

Baxter International (NYSE:BAX) develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney diseases, trauma, and other chronic and acute medical conditions.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Carole ShapazianDirectorMay 25,680No11,266 shares33.5%
Kees StormDirectorApril 235,760Yes15,156 shares27.5%
Blake DevittDirectorApril 214,334No16,541 shares20.8%

There have been 15,774 shares sold by insiders during the last 30 days. Kees Storm 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 Baxter's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
May 20145,6800
April 201410,0940
March 201421,6000
February 201400
January 201400
December 201300
November 201300
October 201300
September 20131,9410
August 201300
July 2013883,8200
June 201300
May 2013155,8000
April 201300
March 201310,0300
February 20138,2200
January 201335,0000

There have been 1,132,185 shares sold, and there have been zero shares purchased by insiders since January, 2013.

Financials

Baxter reported the first-quarter financial results on April 17, with the following highlights:

Revenue$4.0 billion
Net income$556 million
Net debt$6.6 billion

The three insiders sold their shares after these results.

Outlook

Baxter's guidance is as follows:

Q2/2014FY2014
Sales growth12%-13%9%-10%
GAAP EPS$1.11-$1.15$4.67-$4.87

Competition

Baxter's competitors include Becton, Dickinson and Company (NYSE:BDX), Fresenius Medical Care AG & Co. (NYSE:FMS), and Grifols, S.A. (NASDAQ:GRFS). Here is a table comparing these companies.

CompanyBAXBDXFMSGRFS
Market Cap:40.47B21.91B20.67B28.77B
Employees:61,00029,97990,69012,615
Qtrly Rev Growth (yoy):0.150.040.040.05
Revenue:15.76B8.20B14.89B3.80B
Gross Margin:0.510.520.340.52
EBITDA:4.06B2.13B2.87B1.18B
Operating Margin:0.200.200.150.27
Net Income:2.02B941.00M1.11B479.24M
EPS:3.674.791.830.70
P/E:20.3023.6818.7859.73
PEG (5 yr expected):2.132.062.06N/A
P/S:2.572.651.377.53

Baxter has the highest PEG ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
BDX01,303
FMSN/AN/A
GRFSN/AN/A

Only Baxter has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Baxter, and there have not been any insiders buying Baxter during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Baxter has an insider ownership of 0.15%.

Before going short Baxter, 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: Baxter: 3 Different Insiders Have Sold Shares During The Last 30 Days