Intuit: 5 Different Insiders Have Sold Shares During The Last 30 Days

I just watched the film, "The Counselor" which had a great line, "That this is some sort of coincidence. Because they don't really believe in coincidences. They've heard of them. They've just never seen one."   No, we also don't believe in conspiracies....however it's kind of fun to read what some are thinking, no?  Who knows, maybe this fellow is onto something....exactly what we're not quite sure.....and on that note enjoy the writings of Markus Aarnio who for SeekingAlpha writes:

Summary

• 5 insiders sold Intuit stock within one month.
• The stock was not purchased by any insiders in the month of intensive selling.
• 4 of these 5 insiders decreased their holdings by more than 10%.

Intuit (INTU) provides business and financial management solutions for small businesses, consumers, and accounting professionals in the United States, Canada, the United Kingdom, Australia, India, and Singapore.
(click to enlarge)

Insider selling during the last 30 days

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

Name	Title	Trade Date	Shares Sold	Option Exercise & Sale	Rule 10b5-1	Current Ownership	Decrease In Ownership
Mark Flournoy	CAO	June 5	1,921	Yes	No	0 shares + 3,744 options	33.9%
Dan Maurer	SVP	June 3	75,000	Yes	No	17,265 shares + 112,812 options	36.6%
Sasan Goodarzi	SVP	May 22	2,111	No	No	3,179 shares	39.9%
Brad Smith	CEO	May 22	6,000	No	Yes	303,937 shares + 600,966 options	0.7%
Daniel Wernikoff	SVP	May 23	18,000	Yes	No	216 shares	98.8%

There have been 103,032 shares sold by insiders during the last 30 days. Brad Smith sold his 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 Intuit's insider activity by calendar month.

Month	Insider selling / shares	Insider buying / shares
June 2014	76,921	0
May 2014	26,111	0
April 2014	0	0
March 2014	10,000	0
February 2014	100,000	0
January 2014	0	0
December 2013	8,226	0
November 2013	49,000	0
October 2013	0	0
September 2013	195,632	0
August 2013	213,999	0
July 2013	0	0
June 2013	0	0
May 2013	0	0
April 2013	0	0
March 2013	22,782	0
February 2013	154,000	0
January 2013	0	0

There have been 856,671 shares sold and there have been zero shares purchased by insiders since January 2013.

Financials

Intuit reported the fiscal 2014 third-quarter, which ended April 30, financial results on May 20 with the following highlights:

Revenue	$2.4 billion
Net income	$984 million
Cash	$2.6 billion
Debt	$499 million

The five insiders sold their shares after this report.

Outlook

Intuit's guidance is as follows:

	Q4/2014	FY2014
Revenue	$683-$713 million	$4.475-$4.505 billion
GAAP EPS	-$0.10 to -$0.12	$3.08-$3.12

Competition

Intuit's competitors include Automatic Data Processing (ADP), and H&R Block (HRB). Here is a table comparing these companies.

Company	INTU	ADP	HRB
Market Cap:	22.72B	38.38B	8.31B
Employees:	8,000	60,000	2,200
Qtrly Rev Growth (yoy):	0.14	0.07	-0.58
Revenue:	4.43B	11.96B	2.66B
Gross Margin:	0.87	0.49	0.61
EBITDA:	1.50B	2.49B	591.79M
Operating Margin:	0.30	0.18	0.18
Net Income:	844.00M	1.44B	259.30M
EPS:	3.13	3.00	0.83
P/E:	25.54	26.55	36.56
PEG (5 yr expected):	1.71	2.44	1.65
P/S:	5.09	3.17	3.07

Intuit has the highest P/S ratio among these three companies.
Here is a table of these competitors' insider activities this year.

Company	Insider buying / shares	Insider selling / shares
ADP	0	324,383
HRB	0	0

Automatic Data Processing has also seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling Intuit, and there have not been any insiders buying Intuit during the last 30 days. Four of these five insiders decreased their holdings by more than 10%. Intuit has an insider ownership of 4.68%.

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