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Summary

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

The Gap, Inc. (NYSE:GPS) operates as an apparel retail company worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Sabrina SimmonsCFOJune 2312,369Yes0 shares + 22,500 options35.5%
Robert FisherDirectorJune 10-18500,000No107,626,097
shares + 21,048 options
0.5%
Sonia SyngalEVPJune 108,416No0 shares + 32,500 options20.6%
John Fisher10% OwnerMay 30152,379No117,752,543
shares
0.1%

There have been 673,164 shares sold by insiders during the last 30 days. Sabrina Simmons sold her 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 Gap's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
June 2014520,7850
May 2014465,5000
April 201415,0000
March 2014125,4870
February 2014305,3750
January 201400
December 201300
November 20136,8060
October 201324,6880
September 2013207,3530
August 2013296,6850
July 201357,6180
June 2013481,7500
May 20131,893,4900
April 2013549,7960
March 2013700,4350
February 201300
January 201300

There have been 5,650,768 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

Gap reported the fiscal 2014 first-quarter, which ended May 3, financial results on May 22 with the following highlights:

Revenue$3.8 billion
Net income$260 million
Cash$1.5 billion
Debt$1.4 billion

The four insiders sold their shares after these results.

(click to enlarge)

(Source: Earnings presentation)

Gap had negative earnings growth in the first quarter.

News

Gap reported on June 5 that May net sales increased 4% compared with last year.

Outlook

Gap expects earnings per share to be in the range of $2.90 to $2.95 for fiscal year 2014.
(click to enlarge)

(Source: Investor presentation)

Competition

Gap's competitors include Guess? (NYSE:GES), Abercrombie & Fitch (NYSE:ANF), and Ralph Lauren (NYSE:RL). Here is a table comparing these companies.

CompanyGPSGESANFRL
Market Cap:18.34B2.30B3.11B13.97B
Employees:137,00014,6009,00014,000
Qtrly Rev Growth (yoy):0.01-0.05-0.020.14
Revenue:16.19B2.54B4.10B7.45B
Gross Margin:0.460.380.620.58
EBITDA:2.58B314.67M436.65M1.38B
Operating Margin:0.130.090.050.15
Net Income:1.21B140.12M38.16M776.00M
EPS:2.611.650.488.43
P/E:15.9316.3588.4918.68
PEG (5 yr expected):1.095.291.011.83
P/S:1.130.900.761.88

Gap has the second-highest P/S ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
GES01,000,000
ANF30,000221,899
RL03,113,020

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

Conclusion

There have been four different insiders selling Gap and there have not been any insiders buying Gap during the last 30 days. Two of these four insiders decreased their holdings by more than 10%. Gap has an insider ownership of 38.26%.

Before going short Gap, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are negative earnings growth, 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.

Source: Gap: 4 Different Insiders Have Sold Shares During The Last 30 Days