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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.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Colleen ArnoldSVPMay 55,460No23,848 shares18.6%
John KellySVPMay 221,972No28,609 shares43.4%
Robert WeberSVPApril 306,000No23,511 shares20.3%

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.

MonthInsider selling / sharesInsider buying / shares
May 201427,4320
April 20146,0000
March 201400
February 201444,9240
January 201400
December 201300
November 201399,3310
October 201300
September 201300
August 201301,000
July 201300
June 201300
May 201320,8850
April 201300
March 201300
February 2013133,1810
January 201377,4870

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

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.

CompanyIBMACNHPQMSFT
Market Cap:191.23B49.84B60.89B322.65B
Employees:431,212289,000317,50099,000
Qtrly Rev Growth (yoy):-0.040.01-0.01-0.00
Revenue:98.83B28.77B112.09B83.35B
Gross Margin:0.490.330.230.70
EBITDA:25.15B4.42B13.18B31.39B
Operating Margin:0.210.140.080.33
Net Income:15.84B2.90B5.31B22.43B
EPS:14.634.072.732.67
P/E:12.9219.3511.7714.63
PEG (5 yr expected):1.221.511.921.70
P/S:1.961.740.553.91

IBM has the weakest revenue growth among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
ACN02,000
HPQ00
MSFT015,406,000

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.

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