ITC Holdings: 3 Different Insiders Have Sold Shares This Month

|
 |  About: ITC Holdings Corp. (ITC), Includes: AEP
by: Markus Aarnio

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.

Name Title Trade Date Shares Sold Option Exercise & Sale Rule 10b5-1 Current Ownership Decrease In Ownership
Cameron Bready CFO June 3-18 187,205 Yes & No No 21,408
shares + 147,408 options
52.6%
Daniel Oginsky EVP June 9 46,017 Yes No 106,445
shares + 183,114
options
13.7%
William Museler Director June 2 3,054 No No 21,442
shares
12.5%
Click to enlarge

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.

Month Insider selling / shares Insider buying / shares
June 2014 236,276 0
May 2014 191,046 0
April 2014 0 0
March 2014 0 0
February 2014 0 0
January 2014 0 0
December 2013 0 0
November 2013 0 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 26,651 0
February 2013 0 0
January 2013 0 0
Click to enlarge

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
Click to enlarge

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

Click to enlarge

(Source: Earnings presentation)

Competition

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

Company ITC AEP
Market Cap: 5.45B 26.59B
Employees: 539 18,521
Qtrly Rev Growth (yoy): 0.19 0.22
Revenue: 982.57M 16.18B
Gross Margin: 0.88 0.37
EBITDA: 651.91M 5.29B
Operating Margin: 0.55 0.21
Net Income: 250.24M 1.68B
EPS: 1.58 3.44
P/E: 22.03 15.83
PEG (5 yr expected): 1.87 3.26
P/S: 5.69 1.66
Dividend Yield: 1.60% 3.70%
Click to enlarge

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.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.