Kennametal: 3 Different Insiders Have Sold Shares This Month

May.13.14 | About: Kennametal Inc. (KMT)

Summary

3 insiders sold Kennametal 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%.

Kennametal (NYSE:KMT) manufactures and supplies tooling, engineered components, and advanced materials consumed in production processes worldwide.

Click to enlarge

Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Carlos Cardose CEO May 8 40,000 No 168,563
shares
19.2%
William Newlin Director May 2 14,560 No 71,963 shares 16.8%
Philip Dur Director May 2 14,362 No 7,191 shares 66.6%
Click to enlarge

There have been 68,922 shares sold by insiders during the last 30 days.

Insider selling by calendar month

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

Month Insider selling / shares Insider buying / shares
May 2014 68,922 0
April 2014 0 0
March 2014 98,377 0
February 2014 0 0
January 2014 0 0
December 2013 9,000 0
November 2013 58,100 0
October 2013 0 0
September 2013 3,000 0
August 2013 102,767 0
July 2013 0 0
June 2013 0 0
May 2013 63,022 0
April 2013 0 0
March 2013 9,000 0
February 2013 75,431 0
January 2013 0 0
Click to enlarge

There have been 487,619 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Kennametal reported the fiscal 2014 third-quarter, which ended March 31, financial results on May 1 with the following highlights:

Revenue $755.2 million
Net income $50.9 million
Cash $161.8 million
Debt $1.1 billion
Click to enlarge

The three insiders sold their shares after these results.

Outlook

Kennametal's fiscal 2014 guidance is as follows:

Revenue $2.65-$2.67 billion
EPS $2.60-$2.70
Click to enlarge

Click to enlarge

(Source: Investor presentation)

Competition

Kennametal's competitors include Atlas Copco AB (OTCPK:ATLKY) and Sandvik AB (OTCPK:SDVKY). Here is a table comparing these companies.

Company KMT ATLKY SDVKY
Market Cap: 3.73B 35.63B 17.87B
Employees: 12,648 43,846 47,226
Qtrly Rev Growth (yoy): 0.15 0.06 -0.06
Revenue: 2.74B 13.03B 13.18B
Gross Margin: 0.32 0.38 0.34
EBITDA: 415.44M 2.96B 1.91B
Operating Margin: 0.11 0.20 0.10
Net Income: 173.73M 1.81B 770.65M
EPS: 2.18 1.49 0.61
P/E: 21.73 19.66 23.23
PEG (5 yr expected): 3.55 N/A -0.90
P/S: 1.36 2.72 1.34
Click to enlarge

Kennametal is trading at a similar P/E ratio than its competitors.

Conclusion

There have been three different insiders selling Kennametal, and there have not been any insiders buying Kennametal during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Kennametal has an insider ownership of 0.51%.

Before going short Kennametal, 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.

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.