In this article, I will feature one tech stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
Oracle Corporation (ORCL) develops, manufactures, markets, hosts, and supports database and middleware software, applications software and hardware systems.
Insider selling during the last 30 days
Here is a table of Oracle's insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Current Ownership (shares+options)||Decrease In Ownership|
|Thomas Kurian||EVP||Sept 27||400,000||32,327 shares + 1,550,000 options||20.2%|
|Dorian Daley||SVP||Sept 25||100,000||5,000 shares + 50,000 options||64.5%|
|Michael Boskin||Director||Sept 16||30,000||5,000 shares||85.7%|
|Hector Garcia-Molina||Director||Sept 16||2,500||5,000 shares + 35,000 options||5.9%|
There have been 532,500 shares sold by insiders during the last 30 days.
Insider selling by calendar month
Here is a table of Oracle's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 5,209,577 shares sold and there have been zero shares purchased by insiders this year.
Oracle reported the fiscal 2014 first-quarter, which ended August 31, financial results on September 18, with the following highlights:
|Net income||$2.2 billion|
Oracle's guidance for the fiscal 2014 second quarter is as follows:
- New software license and cloud subscription revenue growth is expected to range from negative 4 to positive 6 in constant currency and negative 6 to positive 4 in reported dollars. Hardware product revenue is expected to range from negative 9% to positive 1% in constant dollars and negative 11% to negative 1% in reported dollars. As a result, total revenue growth on both GAAP and non-GAAP basis is expected to range from 1% to 4% in constant dollars and negative 1 to positive 2 in U.S. dollars.
- Non-GAAP EPS is expected to be somewhere between $0.65 and $0.70 in constant dollars, $0.64 to $0.69 in reported dollars. GAAP EPS is expected to be $0.51 to $0.56 in constant dollars, and $0.50 to $0.55 in reported dollars.
Oracle's enterprise software and hardware offerings compete directly with some offerings from some of the largest and most competitive companies in the world, including Microsoft (MSFT), International Business Machines (IBM), Intel (INTC), Hewlett-Packard (HPQ) and SAP AG (SAP) and smaller companies like salesforce.com (CRM), as well as many others.
Here is a table comparing these companies.
Oracle has the second-lowest quarterly revenue growth among these five companies.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Salesforce.com has also seen intensive insider selling during the past 30 days.
There have been four different insiders selling Oracle and there have not been any insiders buying Oracle during the past 30 days. Three of these four insiders decreased their holdings by more than 10%. Oracle has an insider ownership of 23.68%.
Oracle is trading at a P/E ratio of 14.27 and a forward P/E ratio of 10.52. The company has a book value of $9.45 per share and the stock has a dividend yield of 1.45%.
Oracle has a $24 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $24 price target. I would place a stop loss at $35, which is the six-month high. The two main reasons for the proposed short entry are bearish Point and Figure chart and the intensive insider selling activity.