Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message| ()  

I screened with Open Insider for insider sell transactions filed on October 16. From this list, I chose the top five stocks with insider selling in dollar terms. Here is a look at the top five stocks:

1. Range Resources Corporation (RRC) is a leading independent oil and natural gas producer with operations focused in Appalachia and the southwest region of the United States. The company pursues an organic growth strategy targeting high return, low-cost projects within its large inventory of low risk, development drilling opportunities. The company is headquartered in Fort Worth, Texas.


(Click to enlarge)

Insider sells

  • Mark Whitley sold 161,934 shares on October 12-16. Mark Whitley, Senior Vice President - Northern Appalachia & Southwest Divisions, joined Range in December 2005.
  • John Pinkerton sold 50,000 shares on October 11. John Pinkerton, Executive Chairman and a director, became a director in 1988 and was elected Chairman of the Board of Directors in 2008.

Financials

The company reported the second-quarter financial results on July 24 with the following highlights:

Revenue $442.4 million
Net income $55.7 million
Cash $0.2 million

News

The company announced on October 11 its third quarter 2012 production results, preliminary realized prices and an update on its hedging status. On an equivalent basis, production volumes exceeded the upper range of guidance for the third quarter production averaging 790 Mmcfe net per day, a 47% increase over the prior-year quarter and 10% greater than second quarter 2012. The record production was driven by the continued success of the company's drilling program in the Marcellus and horizontal Mississippian oil plays. Production was 79% natural gas, 15% natural gas liquids [NGLs] and 6% crude oil. Year-over-year oil production increased 36%, NGL production rose 30%, while natural gas production increased 52%. Preliminary third quarter average net production volumes were: 623.3 Mmcf per day of natural gas, 20,040 barrels per day of NGLs and 7,748 barrels per day of crude oil.

My analysis

The stock has a $74 price target from the Point and Figure chart. There have been 22 insider sell transactions and there have not been any insider buy transactions this year. The stock is trading at a P/E ratio of 263.70 and a forward P/E ratio of 62.46. The company has a book value of $14.88 per share. I am not interested in shorting the stock before the $74 price target is met.

2. Fastenal Company (FAST), together with its subsidiaries, operates as a wholesaler and retailer of industrial and construction supplies in the United States and internationally. It offers fastener product line under two categories, which include threaded fasteners, such as bolts, nuts, screws, studs, and related washers that are used in manufactured products and building projects, as well as in the maintenance and repair of machines and structures; and miscellaneous supplies and hardware comprising various pins and machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the construction market, which consists of general, electrical, plumbing, sheet metal, and road contractors; and manufacturing market, including original equipment manufacturers, and maintenance and repair operations, as well as other users, such as farmers, truckers, railroads, mining companies, federal, state and local governmental entities, schools, and retail trades. As of September 30, 2012, it operated 2,650 stores. The company was founded in 1967 and is headquartered in Winona, Minnesota.


(Click to enlarge)

Insider sells

  • Robert Kierlin sold 100,000 shares on October 14 and currently holds 12,910,000 shares of the company. Robert Kierlin serves as a director of the company.
  • Steven Rucinski sold 25,000 shares on October 12. Steven Rucinski serves as Executive Vice President of the company.

Financials

The company reported the third-quarter financial results on October 11 with the following highlights:

Revenue $802.6 million
Net income $109.3 million
Cash $195.6 million

My analysis

The stock has a $58 price target from the Point and Figure chart. There have been 16 insider sell transactions and eight insider buy transactions this year. The stock is trading at a P/E ratio of 32.55 and a forward P/E ratio of 26.90. The company has a book value of $5.61 per share. I am not interested in shorting the stock before the $58 price target is met which would also mark a new all time high for the stock.

3. MetroPCS Communications (PCS) is a provider of no annual contract, unlimited wireless communications service for a flat rate. MetroPCS is the fifth largest facilities-based wireless carrier in the United States based on number of subscribers served. With Metro USA, MetroPCS customers can use their service in areas throughout the United States covering a population of over 280 million people. As of June 30, 2012, MetroPCS had approximately 9.3 million subscribers.


(Click to enlarge)

Insider sells

  • Ta Associates sold 290,304 shares on October 12-16, 530,130 shares on October 9-11, 543,465 shares on October 4-8 and 733,466 shares on October 1-3 pursuant to a Rule 10b5-1 trading plans adopted by TA Associates on February 29, 2012 and March 1, 2012.
  • J. Braxton Carter sold 10,000 shares on October 2 pursuant to a Rule 10b5-1 trading plan adopted by the reporting person on May 5, 2011. J. Braxton Carter became MetroPCS Communications' Chief Financial Officer and Vice Chairman in May 2011.

Financials

The company reported the second-quarter financial results on July 26 with the following highlights:

Revenue $1.281 billion
Net income $149 million
Cash $1.9 billion

News

Deutsche Telekom (OTCQX:DTEGY) and MetroPCS Communications announced on October 3 that they have signed a definitive agreement to combine T-Mobile USA and MetroPCS. This transaction will create the leading value carrier in the U.S. wireless marketplace, which will deliver an enhanced customer experience through a wider selection of affordable products and services, deeper network coverage and a clear-cut technology path to one common LTE network. The combined company, which will retain the T-Mobile name, will have the expanded scale, spectrum and financial resources to aggressively compete with the other national U.S. wireless carriers.

Deutsche Telekom's supervisory board and MetroPCS' board of directors approved the transaction. The transaction is structured as a recapitalization, in which MetroPCS will declare a 1 for 2 reverse stock split, make a cash payment of $1.5 billion to its shareholders (approximately $4.09 per share prior to the reverse stock split) and acquire all of T-Mobile's capital stock by issuing to Deutsche Telekom 74% of MetroPCS' common stock on a pro forma basis. Deutsche Telekom has also agreed to roll its existing intercompany debt into new $15 billion senior unsecured notes of the combined company, provide the combined company with a $500 million unsecured revolving credit facility and provide a $5.5 billion backstop commitment for certain MetroPCS third-party financing transactions.

The combined company will be a stronger competitor and will be well-positioned to drive future growth. Based on analyst consensus estimates for 2012, the combined company is expected to have approximately 42.5 million subscribers, $24.8 billion of revenue, $6.3 billion of adjusted EBITDA, $4.2 billion of capital expenditures and $2.1 billion of free cash flow (defined as EBITDA less capital expenditures) in 2012.

My analysis

The stock has a $32 price target from the Point and Figure chart. There have been 25 insider sell transactions and there have not been any insider buy transactions since February 2012. The stock is trading at a P/E ratio of 12.24 and a forward P/E ratio of 14.89. The company has a book value of $8.59 per share. I am not interested in shorting the stock before the $32 price target is hit.

4. Visa (V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks - VisaNet - that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products.


(Click to enlarge)

Insider sells

  • Antonio Lucio sold 18,800 shares on October 15 pursuant to a rule 10b5-1 trading plan adopted by the reporting person on September 13, 2012. Antonio Lucio is Global Chief Marketing Officer and Global Head of Human Resources for Visa.
  • Ellen Richey sold 93,711 shares on September 10 pursuant to a rule 10b5-1 trading plan and currently holds 13,573 shares of the company. Ellen Richey joined Visa as the global head of enterprise risk in September 2007.
  • Joseph Saunders sold 264,959 shares on September 7 pursuant to a rule 10b5-1 trading plan and currently controls 103,907 shares of the company. Joseph Saunders is chairman and chief executive officer of Visa.
  • Elizabeth Buse sold 14,401 shares on September 6 pursuant to a Rule 10b5-1 trading plan and currently controls 23,110 shares of the company. Elizabeth Buse is the group president, APCEMEA for Visa.

Financials

The company reported the fiscal third-quarter 2012 ended June 30, 2012 financial results on July 25 with the following highlights:

Revenue $2.6 billion
Net loss $1.8 billion
Cash $9.4 billion

On a GAAP basis, the company reported a net loss of $1.8 billion, inclusive of a litigation provision of $4.1 billion, related to the previously announced settlement agreement in the Multi-District Litigation case.

Outlook

Visa updated its financial outlook for the following metric through 2012:

  • Adjusted annual diluted class A common stock earnings per share growth in the low twenties.

Visa affirmed its financial outlook for the following metrics for 2012:

  • Annual net revenue growth in the low double digits;
  • Client incentives as a percent of gross revenues: 17% to 18% range;
  • Marketing expenses: Under $1 billion;
  • Adjusted annual operating margin of about 60%;
  • Adjusted tax rate: 33% to 34% range;
  • Capital expenditures $350 million to $400 million range; and
  • Annual free cash flow greater than $4 billion.

My analysis

The stock has a $156 price target from the Point and Figure chart. There have been 26 insider sell transactions and there have not been any insider buy transactions this year. The stock is trading at a P/E ratio of 139.76 and a forward P/E ratio of 19.72. The stock is making new all time highs. I am not interested in shorting the stock before the $156 price target is hit.

5. Fusion-io (FIO) delivers the world's data faster. The company's Fusion ioMemory platform and software defined storage solutions accelerate virtualization, databases, cloud computing, big data and performance applications. From e-commerce retailers to the world's social media leaders and Fortune Global 500 companies, the company's customers are improving the performance and efficiency of their data centers with Fusion-io technology to accelerate the critical applications of the information economy.


(Click to enlarge)

Insider sells

  • David Flynn sold 80,000 shares on October 15-16, 80,000 shares on September 17-18 and 199,100 shares on September 14 pursuant to a Rule 10b5-1 trading plan. David Flynn is Chairman, CEO & President of the company.
  • Dennis Wolf sold 30,000 shares on October 15 pursuant to a Rule 10b5-1 trading plan. Dennis Wolf is Chief Financial Officer of the company.
  • Lance Smith sold 19,583 shares on October 15 pursuant to a Rule 10b5-1 trading plan. Lance Smith is Chief Operating Officer of the company.
  • Neil Carson sold 16,458 shares on October 12-16 pursuant to a Rule 10b5-1 trading plan. Neil Carson is Chief Technology Officer of the company.
  • Rick White sold 80,000 shares on October 9 and 207,578 shares on September 14 pursuant to a Rule 10b5-1 trading plan. Rick White is Chief Marketing Officer and Executive Vice President of the company.

Financials

The company reported the financial results for its fiscal year 2012 (ended June 30, 2012) on August 9 with the following highlights:

Revenue $359.3 million
Net loss $5.6 million
Cash $321.2 million

Outlook

The company gave the following guidance on August 9:

First quarter of fiscal year 2013:

  • Revenue is expected to modestly increase from fiscal Q4.
  • Non-GAAP gross margin is expected to be in the range of 56 to 58%.
  • Non-GAAP operating margin is expected to be approximately 10%.
  • Diluted shares outstanding is expected to be approximately 110 million shares.

Fiscal Year 2013:

  • Revenue growth is expected to be in the range of 45 to 50%.
  • Non-GAAP gross margin is expected to be in the range of 56 to 58%.
  • Non-GAAP operating margin is expected to be approximately 12%.
  • Non-GAAP tax rate is expected to be approximately 35 to 40%.
  • Diluted shares outstanding is expected to be approximately 114 million shares.
  • Capital Expenditures are expected to be in the range of $20 to $25 million.

My analysis

The stock has a $54.5 price target from the Point and Figure chart. There have been 49 insider sell transactions and there have not been any insider buy transactions since July 2012. The stock is trading at a forward P/E of 50.48. I am not interested in shorting the stock before the $54.5 price target is hit.

Source: Top 5 Stocks With Insider Sells Filed On October 16 To Consider