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Kohl’s Directors Conducting Life Boat Drills. All Rats Leave Early! $KSS

Kohl's at the Gateway Shopping Center in north...

Kohl’s at the Gateway Shopping Center in northeast Portland, Oregon. (Photo credit: Wikipedia)

Kohl’s Corporation (NYSE:KSS) entered the prime Christmas Selling season with several key insiders selling their shares. All retailers are highly sensitive to reports of Christmas Sales. This is like the super bowl for pro football. You  have to be great and there is no tomorrow,

Check out these massive insider sales transactions

  1. Long-service director William Kellogg, who as a former CEO and Chairman at Kohl led a MBO of the company in 1986, hit the sell button for 1.5 million shares in early November valued at almost $82 million, 600,000 shares in September valued at more than $32 million, and 900,000 shares in August valued at over $46 million.
  2. Similarly, long-service director and former COO John Herma sold about 740,000 shares at the beginning of November for more than $40 million, about 260,000 shares in September worth over $14 million, and 500,000 shares in August worth nearly $26 million.
  3. Prior to these transactions, Mr. Kellogg had made no sales since 2009 while Mr. Herma had made no sales since 2011. Moreover, their transactions were generally made on the same days.

Coincidence. I’ve long given up on the tooth fairy. In a retailer by Aug/Sep your Christmas Game Plan is already set. You’re into execution mode. So when the big guns are selling you do not need fundamental analysis.

The stock ran up from around $43 late June to $55 first week of Nov. Then the bad news all started to come out. Sales are off dramatically and the stock has dropped. The olde dogs saw it coming and sold out. Surprisingly the money flow still clocks in at 1.23. Not a good set up.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti and follow his evil twin brother who writes wall street murder thrillers at twitter@georgegutowski