Monsanto: 4 Different Insiders Have Sold Shares This Year

| About: Monsanto Company (MON)

In this article, I will feature one agricultural stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Monsanto Company (NYSE:MON) provides agricultural products for farmers worldwide.

Insider selling during the last 30 days

Here is a table of Monsanto's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Hugh Grant CEO Jan 17 44,179 No 475,507 shares 8.5%
Robert Fraley CTO Jan 16 64,850 No 118,039 shares + 24,740 options 31.2%
Steven Mizell EVP Jan 14 24,000 No 37,189 shares + 23,267 options 28.4%
Tom Hartley VP Jan 14 10,000 Yes 15,515 shares + 7,900 options 29.9%

There have been 143,029 shares sold by insiders during the last 30 days. Tom Hartley sold 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 Monsanto's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
January 2014 143,029 0
December 2013 0 0
November 2013 13,560 0
October 2013 20,730 0
September 2013 5,276 0
August 2013 0 0
July 2013 106,073 0
June 2013 0 0
May 2013 112,086 0
April 2013 411,899 0
March 2013 0 0
February 2013 0 0
January 2013 139,637 0

There have been 952,290 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Monsanto reported the fiscal 2014 first-quarter, which ended November 30, financial results on January 8 with the following highlights:

Revenue $3.1 billion
Net income $368 million
Cash $4.7 billion
Debt $3.3 billion

(Source: Earnings presentation)

Outlook

Monsanto's fiscal 2014 guidance is as follows:

EPS $5.00-$5.20
Free cash flow $600-$800 million

(Source: Earnings presentation)

Competition

Monsanto's competitors include BASF SE (OTCQX:BASFY), DuPont (NYSE:DD), and Syngenta (NYSE:SYT). Here is a table comparing these companies.

Company MON BASFY DD SYT Industry Average (Agricultural Chemicals)
Market Cap: 57.98B 99.89B 58.46B 35.93B 1.86B
Employees: 21,900 112,617 70,000 27,000 1.07K
Qtrly Rev Growth (yoy): 0.07 0.02 0.05 0.02 0.17
Revenue: 15.06B 95.56B 35.55B 14.33B 3.84B
Gross Margin: 0.52 0.25 0.28 0.48 0.28
EBITDA: 4.25B 12.75B 5.58B 2.95B 297.77M
Operating Margin: 0.24 0.09 0.11 0.17 0.08
Net Income: 2.50B 6.06B 2.68B 1.79B N/A
EPS: 4.66 6.60 5.12 3.88 2.25
P/E: 23.75 16.48 12.30 20.13 11.67
PEG (5 yr expected): 1.54 8.54 2.14 N/A 1.63
P/S: 3.95 1.05 1.66 2.51

0.64

Monsanto has the highest P/S ratio among these four companies.

Here is a table of these competitors' insider-trading activities during the last 12 months.

Company Insider buying / shares Insider selling / shares
BASFY N/A N/A
DD

0

1,084,843
SYT N/A N/A

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

Conclusion

There have been four different insiders selling Monsanto, and there have not been any insiders buying Monsanto during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Monsanto has an insider ownership of 0.30%.

Before going short Monsanto, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high P/S ratio, and the intensive insider-selling activity.

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

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