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Summary

  • 3 insiders sold ITC Holdings 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% each.

ITC Holdings Corp. (NYSE:ITC) is engaged in the transmission of electricity in the United States.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of ITC Holdings' insider activity during the last 30 days.

NameTitleTrade DateShares SoldOption Exercise & SaleRule 10b5-1Current OwnershipDecrease In Ownership
Cameron BreadyCFOJune 3-18187,205Yes & NoNo21,408
shares + 147,408 options
52.6%
Daniel OginskyEVPJune 946,017YesNo106,445
shares + 183,114
options
13.7%
William MuselerDirectorJune 23,054NoNo21,442
shares
12.5%

There have been 236,276 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of ITC Holdings' insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
June 2014236,2760
May 2014191,0460
April 201400
March 201400
February 201400
January 201400
December 201300
November 201300
October 201300
September 201300
August 201300
July 201300
June 201300
May 201300
April 201300
March 201326,6510
February 201300
January 201300

There have been 453,973 shares sold and there have been zero shares purchased by insiders since January 2013. The month of June 2014 has seen the most insider selling.

Financials

ITC Holdings reported the first-quarter financial results on May 1 with the following highlights:

Revenue$258.6 million
Net income$69.1 million
Cash$14.0 million
Debt$3.7 billion

The three insiders sold their shares after these results.

(click to enlarge)

(Source: Earnings presentation)

Outlook

ITC Holdings' 2014 guidance is as follows:

EPS$1.83-$1.90
Capital investment guidance$730-$840 million

(click to enlarge)

(Source: Earnings presentation)

Competition

ITC Holdings' competitors include American Electric Power (NYSE:AEP). Here is a table comparing these two companies.

CompanyITCAEP
Market Cap:5.45B26.59B
Employees:53918,521
Qtrly Rev Growth (yoy):0.190.22
Revenue:982.57M16.18B
Gross Margin:0.880.37
EBITDA:651.91M5.29B
Operating Margin:0.550.21
Net Income:250.24M1.68B
EPS:1.583.44
P/E:22.0315.83
PEG (5 yr expected):1.873.26
P/S:5.691.66
Dividend Yield:1.60%3.70%

ITC Holdings is trading at a higher P/S ratio than American Electric Power. In American Electric Power, there have been 48,021 shares sold and there have been zero shares purchased by insiders this year. Only ITC Holdings has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling ITC Holdings and there have not been any insiders buying ITC Holdings during the last 30 days. All three of these insiders decreased their holdings by more than 10% each. ITC Holdings has an insider ownership of 1.56%.

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

Source: ITC Holdings: 3 Different Insiders Have Sold Shares This Month