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Summary

  • 6 insiders sold Raytheon stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • 3 of these 6 insiders decreased their holdings by more than 10%.

Raytheon Company (NYSE:RTN) develops integrated products, services, and solutions in the areas of sensing; effects; command, control, communications, and intelligence; mission support; and cyber and information security worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
William SwansonChairmanJune 642,608Yes647,310
shares
6.2%
Jay StephensSVPMay 30-June 625,038Yes79,961
shares
23.8%
Rebecca RhoadsVPJune 2-64,847Yes33,597 shares12.6%
Taylor LawrenceVPJune 2-64,169Yes66,858
shares
5.9%
Richard GogliaVPJune 2-62,994Yes21,706 shares12.1%
Michael WoodCAOJune 21,720Yes26,735
shares
6.0%

There have been 81,376 shares sold by insiders during the last 30 days. All these shares were sold 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 Raytheon's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
June 201466,3760
May 201415,0000
April 20143,8390
March 201424,2570
February 201431,8920
January 201400
December 201320,2140
November 201300
October 201300
September 201375,4040
August 201313,4640
July 201300
June 2013131,5350
May 201300
April 201320,0000
March 201310,000

0

February 201388,3580
January 20136,0000

There have been 506,339 shares sold and there have been zero shares purchased by insiders since January 2013. The month of June has seen the most insider selling this year.

Financials

Raytheon reported the first-quarter financial results on April 24 with the following highlights:

Revenue$5.5 billion
Net income$596 million
Cash$4.5 billion
Debt$4.7 billion
Bookings$4.3 billion
Funded backlog$22.8 billion

The six insiders sold their shares after this report.

Raytheon has negative revenue growth currently.

Outlook

Raytheon's 2014 guidance is as follows:

Net sales$22.5-$23.0 billion
Adjusted EPS$5.76-$5.91

(click to enlarge)

(Source: Investor presentation)

Competition

Raytheon's competitors include Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), and Northrop Grumman (NYSE:NOC). Here is a table comparing these companies.

CompanyRTNBALMTNOC
Market Cap:29.88B96.21B51.23B25.66B
Employees:63,000168,400115,00065,300
Qtrly Rev Growth (yoy):-0.060.08-0.04-0.04
Revenue:23.34B88.20B44.94B24.40B
Gross Margin:0.220.150.110.22
EBITDA:3.42B8.21B5.62B3.70B
Operating Margin:0.130.070.110.13
Net Income:1.99B4.44B3.12B2.04B
EPS:6.445.809.678.93
P/E:14.8322.7416.8113.42
PEG (5 yr expected):1.221.691.721.84
P/S:1.291.111.151.07

Raytheon has the weakest revenue growth among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
BA0204,242
LMT098,228
NOC0349,042

Only Raytheon has seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling Raytheon and there have not been any insiders buying Raytheon during the last 30 days. Three of these six insiders decreased their holdings by more than 10%. Raytheon has an insider ownership of 0.43%.

Before going short Raytheon, 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: Raytheon: 6 Different Insiders Have Sold Shares During The Last 30 Days