International Paper: 3 Different Insiders Have Sold Shares This Month

Jun.10.14 | About: International Paper (IP)

Summary

3 insiders sold International Paper stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

2 of these 3 insiders decreased their holdings by more than 10%.

International Paper Company (NYSE:IP) operates as a paper and packaging company in North America, Europe, Latin America, Russia, Asia, and the Middle East.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Option Exercise & Sale Rule 10b5-1 Current Ownership Decrease In Ownership
Mary Laschinger SVP June 6 20,000 No No 178,161 shares 10.1%
Thomas Kadien SVP June 5 22,000 No No 167,747 shares 11.6%
John Faraci CEO June 2 30,000 No Yes 1,531,105 shares 1.9%
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There have been 72,000 shares sold by insiders during the last 30 days. John Faraci sold his 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 International Paper's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2014 72,000 0
May 2014 30,000 0
April 2014 30,000 0
March 2014 89,565 0
February 2014 85,377 0
January 2014 10,000 0
December 2013 22,988 0
November 2013 10,000 0
October 2013 10,000 0
September 2013 10,000 0
August 2013 20,000 0
July 2013 28,000 0
June 2013 19,325 0
May 2013 85,384 0
April 2013 10,000 0
March 2013 155,188

0

February 2013 97,750 0
January 2013 44,500 0
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There have been 830,077 shares sold and there have been zero shares purchased by insiders since January 2013.

Financials

International Paper reported the first-quarter financial results on April 30 with the following highlights:

Revenue $7.0 billion
Net loss $95 million
Cash $1.3 billion
Debt $11.5 billion
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The three insiders sold their shares after this report.

International Paper has negative revenue growth currently.

Outlook

In the second quarter, International Paper is going to experience its heaviest maintenance outage quarter of the year, up $60 million from the first quarter.

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(Source: Earnings presentation)

Competition

International Paper's competitors include Domtar (NYSE:UFS), MeadWestvaco (MWV), and UPM-Kymmene Oyj (OTCQX:UPMKY). Here is a table comparing these companies.

Company IP UFS MWV UPMKY
Market Cap: 20.89B 3.01B 7.41B 9.57B
Employees: 69,000 9,400 16,000 20,768
Qtrly Rev Growth (yoy): -0.01 0.04 0.01 0.00
Revenue: 29.00B 5.44B 5.40B 13.74B
Gross Margin: 0.27 0.19 0.19 0.11
EBITDA: 3.79B 654.00M 811.00M 1.54B
Operating Margin: 0.08 0.05 0.08 0.06
Net Income: 965.00M 85.00M 353.00M 657.05M
EPS: 2.14 2.64 4.79 1.23
P/E: 22.38 34.41 9.23 14.63
PEG (5 yr expected): 0.96 3.57 2.45 N/A
P/S: 0.72 0.54 1.37 0.70
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International Paper is the only one with negative revenue growth.

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

Company Insider buying / shares Insider selling / shares
UFS 0 37,343
MWV

0

1,658
UPMKY 0 0
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Only International Paper has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling International Paper, and there have not been any insiders buying International Paper during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. International Paper has an insider ownership of 0.67%.

International Paper has a $38 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $38 price target. I would place a stop loss at $50, which is the all-time high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, negative revenue growth, and the intensive insider-selling activity.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in IP over 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.