IBM: 3 Different Insiders Have Sold Shares During The Last 30 Days

May. 7.14 | About: International Business (IBM)

Summary

3 insiders sold IBM 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%.

International Business Machines Corporation (NYSE:IBM) provides information technology products and services worldwide.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Colleen Arnold SVP May 5 5,460 No 23,848 shares 18.6%
John Kelly SVP May 2 21,972 No 28,609 shares 43.4%
Robert Weber SVP April 30 6,000 No 23,511 shares 20.3%
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There have been 33,432 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of IBM's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 27,432 0
April 2014 6,000 0
March 2014 0 0
February 2014 44,924 0
January 2014 0 0
December 2013 0 0
November 2013 99,331 0
October 2013 0 0
September 2013 0 0
August 2013 0 1,000
July 2013 0 0
June 2013 0 0
May 2013 20,885 0
April 2013 0 0
March 2013 0 0
February 2013 133,181 0
January 2013 77,487 0
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There have been 409,240 shares sold, and there have been 1,000 shares purchased by insiders since January 2013.

Financials

IBM reported the first-quarter financial results on April 16 with the following highlights:

Revenue $22.5 billion
Net income $2.4 billion
Cash $9.7 billion
Debt $44.0 billion
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The three insiders sold their shares after these results.

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IBM has negative revenue growth currently.

Outlook

IBM's 2014 guidance is as follows:

GAAP EPS $17.00
Non-GAAP EPS $18.00
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(Source: Earnings presentation)

Competition

IBM's competitors include Accenture (NYSE:ACN), Hewlett-Packard (NYSE:HPQ), and Microsoft (NASDAQ:MSFT). Here is a table comparing these companies.

Company IBM ACN HPQ MSFT
Market Cap: 191.23B 49.84B 60.89B 322.65B
Employees: 431,212 289,000 317,500 99,000
Qtrly Rev Growth (yoy): -0.04 0.01 -0.01 -0.00
Revenue: 98.83B 28.77B 112.09B 83.35B
Gross Margin: 0.49 0.33 0.23 0.70
EBITDA: 25.15B 4.42B 13.18B 31.39B
Operating Margin: 0.21 0.14 0.08 0.33
Net Income: 15.84B 2.90B 5.31B 22.43B
EPS: 14.63 4.07 2.73 2.67
P/E: 12.92 19.35 11.77 14.63
PEG (5 yr expected): 1.22 1.51 1.92 1.70
P/S: 1.96 1.74 0.55 3.91
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IBM has the weakest revenue growth among these four companies.

Here is a table of these competitors' insider activities during the last 30 days.

Company Insider buying / shares Insider selling / shares
ACN 0 2,000
HPQ 0 0
MSFT 0 15,406,000
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Only IBM has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling IBM, and there have not been any insiders buying IBM during the last 30 days. All three of these insiders decreased their holdings by more than 10%. IBM has an insider ownership of 0.10%.

Before going short IBM, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are negative revenue growth, 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.