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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.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Carlos CardoseCEOMay 840,000No168,563
shares
19.2%
William NewlinDirectorMay 214,560No71,963 shares16.8%
Philip DurDirectorMay 214,362No7,191 shares66.6%

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.

MonthInsider selling / sharesInsider buying / shares
May 201468,9220
April 201400
March 201498,3770
February 201400
January 201400
December 20139,0000
November 201358,1000
October 201300
September 20133,0000
August 2013102,7670
July 201300
June 201300
May 201363,0220
April 201300
March 20139,0000
February 201375,4310
January 201300

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

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)

(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.

CompanyKMTATLKYSDVKY
Market Cap:3.73B35.63B17.87B
Employees:12,64843,84647,226
Qtrly Rev Growth (yoy):0.150.06-0.06
Revenue:2.74B13.03B13.18B
Gross Margin:0.320.380.34
EBITDA:415.44M2.96B1.91B
Operating Margin:0.110.200.10
Net Income:173.73M1.81B770.65M
EPS:2.181.490.61
P/E:21.7319.6623.23
PEG (5 yr expected):3.55N/A-0.90
P/S:1.362.721.34

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.

Source: Kennametal: 3 Different Insiders Have Sold Shares This Month