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

Jun.26.14 | About: The Gap, (GPS)

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.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Sabrina Simmons CFO June 23 12,369 Yes 0 shares + 22,500 options 35.5%
Robert Fisher Director June 10-18 500,000 No 107,626,097
shares + 21,048 options
0.5%
Sonia Syngal EVP June 10 8,416 No 0 shares + 32,500 options 20.6%
John Fisher 10% Owner May 30 152,379 No 117,752,543
shares
0.1%
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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.

Month Insider selling / shares Insider buying / shares
June 2014 520,785 0
May 2014 465,500 0
April 2014 15,000 0
March 2014 125,487 0
February 2014 305,375 0
January 2014 0 0
December 2013 0 0
November 2013 6,806 0
October 2013 24,688 0
September 2013 207,353 0
August 2013 296,685 0
July 2013 57,618 0
June 2013 481,750 0
May 2013 1,893,490 0
April 2013 549,796 0
March 2013 700,435 0
February 2013 0 0
January 2013 0 0
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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
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The four insiders sold their shares after these results.

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(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.
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(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.

Company GPS GES ANF RL
Market Cap: 18.34B 2.30B 3.11B 13.97B
Employees: 137,000 14,600 9,000 14,000
Qtrly Rev Growth (yoy): 0.01 -0.05 -0.02 0.14
Revenue: 16.19B 2.54B 4.10B 7.45B
Gross Margin: 0.46 0.38 0.62 0.58
EBITDA: 2.58B 314.67M 436.65M 1.38B
Operating Margin: 0.13 0.09 0.05 0.15
Net Income: 1.21B 140.12M 38.16M 776.00M
EPS: 2.61 1.65 0.48 8.43
P/E: 15.93 16.35 88.49 18.68
PEG (5 yr expected): 1.09 5.29 1.01 1.83
P/S: 1.13 0.90 0.76 1.88
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Gap has the second-highest P/S ratio among these four companies.

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

Company Insider buying / shares Insider selling / shares
GES 0 1,000,000
ANF 30,000 221,899
RL 0 3,113,020
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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.