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Summary

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

Netflix (NASDAQ:NFLX) provides Internet television network service that enables subscribers to stream TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldOption Exercise & SaleRule 10b5-1Current OwnershipDecrease In Ownership
David HymanGCMay 23-June 186,801YesYes5,230
shares + 27,328 options
17.3%
Richard BartonDirectorMay 23-June 1810,000YesYes6,343 shares + 40,183 options17.7%
Ted SarandosCCOJune 1836,701YesYes0 shares + 32,574 options53.0%
Neil HuntCPOJune 25,000YesYes80,786
shares + 129,645 options
2.3%
Ann MatherDirectorMay 276,127YesYes0 shares + 5,789 options51.4%
Reed HastingsCEOMay 2715,238YesYes952,215
shares + 1,422,206
options
0.6%

There have been 79,867 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 Netflix's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
June 201450,4030
May 201440,9330
April 201420,2380
March 20145,0000
February 201430,3090
January 201450,4360
December 201322,4490
November 201341,0200
October 2013401,9470
September 201330,4340
August 201336,2350
July 201352,4260
June 201315,9880
May 2013152,9850
April 2013512,8140
March 20137500
February 20131,6040
January 2013398,9710

There have been 1,864,942 shares sold and there have been zero shares purchased by insiders since January 2013.

Financials

Netflix reported the first-quarter financial results on April 21 with the following highlights:

Revenue$1.3 billion
Net income$53.1 million
Cash$1.7 billion
Debt$0.9 billion

The six insiders sold their shares after these results.

Outlook

Netflix's second-quarter guidance is as follows:

Total streaming members49.81 million
Net income$69 million
EPS$1.12

(Source: Earnings letter)

Competition

Netflix's competitors include Amazon.com (NASDAQ:AMZN). Here is a table comparing these two companies.

CompanyNFLXAMZN
Market Cap:26.38B149.19B
Employees:2,022117,300
Qtrly Rev Growth (yoy):0.240.23
Revenue:4.62B78.12B
Gross Margin:0.300.28
EBITDA:342.83M3.79B
Operating Margin:0.060.01
Net Income:162.83M300.00M
EPS:2.660.64
P/E:165.42505.77
PEG (5 yr expected):3.017.01
P/S:5.731.93

Netflix has a higher P/S ratio than Amazon. In Amazon, there have been 1,060,995 shares sold and there have been zero shares purchased by insiders this year. Only Netflix has seen intensive insider selling during the last 30 days.

Conclusion

There have been six different insiders selling Netflix and there have not been any insiders buying Netflix during the last 30 days. Four of these six insiders decreased their holdings by more than 10%. Netflix has an insider ownership of 2.21%.

Before going short Netflix, I would like to get a bearish confirmation from the Point & Figure chart. The three main reasons for the proposed short entry are a relatively high P/S ratio, high P/E ratio, and the intensive insider-selling activity.

Source: Netflix: 6 Different Insiders Have Sold Shares During The Last 30 Days