Insiders made noteworthy buys (see definition below) in three consumer and retail sector stocks this past week (May 29th to June 1st, 2012), and sold eight others. These, along with insider buys and sells last week in other sectors and groups (discussed in prior articles on the basic materials and energy and healthcare sectors), were selected based on a review of over 1,200 separate SEC Form 4 (insider trading) filings last week, as part of our daily and weekly coverage of insider trades.
The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):
PetSmart Inc. (PETM): PETM is a leading specialty retailer of over 1,200 PetsMart stores in the U.S., Puerto Rico and Canada, that provide pet food, supplies and services. On Tuesday and Friday of last week, nine insiders filed SEC Forms 4 indicating that they sold 255,114 shares (part of the shares resulting from the exercise of options) for $16.2 million, in comparison to 1.78 million shares sold by insiders in the past year.
PETM reported a blockbuster Q1 (April) just the week before last, on Wednesday, with revenues coming in-line and beating analyst earnings estimates (85c v/s 73c), and raising its guidance for FY 2012 earnings ($3.19-$3.31 v/s $3.13). It also reported strong underlying metrics, in terms of strong 7.4% same-store-sales growth v/s consensus estimates of 4.8%, and gross margin expansion by 90 basis points. The stock reacted positively, gapping up the next day, and it currently trades near -its all-time highs, up about 23% YTD, among the strongest players in the retail sector. The stock trades at 17-18 forward P/E and 6.3 P/B compared to averages of 19.3 and 2.3 for its peers in the retail miscellaneous/ diversified group, while earnings are projected to grow at a strong 19.8% annual rate from $2.55 in 2012 to $3.66 in 2014.
In addition to PETM, insiders also reported noteworthy sells last week in seven other consumer and retail sector stocks, including the first two below that like PETM above have share prices that have been surging recently to their highs:
- The TJX Companies (TJX), that is a leading off-price apparel and home fashions retailer in the U.S. and internationally, operating its stores under the T.J. Maxx, Marshalls, Winners, HomeSense, HomeGoods and T.K. Maxx trademarks, in which CEO Carol Meyrowitz filed SEC Form 4 indicating that she sold 127,014 shares for $5.3 million, in comparison to 0.74 million shares sold by insiders in the past year;
- Dillard's Inc. (DDS), a national home furnishings, cosmetics and fashion apparel retailer operating over 300 department stores, in which two insiders filed SEC Forms 4 indicating that they sold 45,417 shares for $3.1 million, in comparison to 0.20 million shares sold by insiders in the past year;
- Toll Brothers Inc. (TOL), that builds single-family detached and attached homes in luxury residential communities in the U.S., in which Director Bruce Toll filed SEC Form 4 indicating that he sold 400,000 shares for $11.2 million, in comparison to 4.52 million shares sold by insiders in the past year;
- Comcast Corp. (CMCSA), that provides cable services and content to 22.8 million subscribers in 39 states, as well as Internet and phone services, in which Vice Chairman and CFO Michael Angelakis filed SEC Form 4 indicating that he sold 179,690 shares for $5.2 million, pursuant to a 10b5-1 plan, in comparison with insiders selling 1.32 million shares in the past year;
- Campbell Soup Co. (CPB), a global manufacturer of condensed and ready-to-serve soups, and other branded convenience food products, in which SVP Ellen Kaden filed SEC Forms 4 indicating that she exercised options and sold the resulting 86,250 shares for $2.8 million, in comparison to insiders selling 0.58 million shares in the past year;
- United Continental Holdings (UAL) provides air transportation for passengers, freight and mail with over 5,675 flights daily to over 372 airports on six continents, in which Director Glenn Tilton filed SEC Form 4 indicating that he exercised options and sold the resulting 88,888 shares for $2.2 million, pursuant to a 10b5-1 trading plan, and in comparison to 0.29 million shares sold in the past year; and
- Delta Air Lines Inc. (DAL), that provides international and domestic passenger and cargo transportation in the U.S. and abroad, offering services to 357 destinations in 66 countries, in which two insiders filed SEC Forms 4 indicating that they sold 76,631 shares for $0.9 million, in comparison to 0.48 million shares sold by insiders in the past year.
On top of these, insiders also reported noteworthy buys this past week in the consumer and retail sectors in:
- Tyson Foods Inc. (TSN), that is one of the world's largest fully-integrated producers and marketers of beef, chicken, pork, and related allied products for grocery retailers, wholesalers, and meat distributors, in which Director Robert Thurber filed SEC Form 4 indicating that he purchased 5,000 shares for $96,975, the only insider purchase in the past year;
- Motorola Solutions Inc. (MSI), a manufacturer of two-way radios, wireless network security products, and voice and data communications systems, in which Director William Bratton filed SEC Form 4 indicating that he purchased 1,025 shares for $49,042, the only insider purchase in the past year; and
- Pitney-Bowes Inc. (PBI), that is a leading provider of mail processing equipment and integrated mail solutions worldwide, including the rental of postage meters, the sale and financing of mailing equipment, and the rental and service of reprographic and facsimile equipment, in which EVP Leslie Abi-Karam filed SEC Form 4 indicating he purchased 1,950 shares for $26,547, and with another 2,500 shares purchased just last week by EVP Vicki O'Meara, they constitute the only insider purchased at least in the past two years.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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