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%.
IPG Photonics Corporation (IPGP) develops and manufactures fiber lasers, fiber amplifiers, and diode lasers that are used in various applications, primarily in materials processing.
Insider selling during the last 30 days
Here is a table of IPG Photonics' insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Eugene Scherbakov||SVP||Oct 22||3,437||Yes||11,910 shares + 2,750 options||19.0%|
|Timothy Mammen||SVP||Oct 17||3,750||Yes||28,624 shares||11.6%|
|Valentin Gapontsev Trust I||10% Owner||Oct 15||5,250||Yes||7,887,250 shares||0.1%|
There have been 12,437 shares sold by insiders during the last 30 days. 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 IPG Photonics' insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 143,315 shares sold and there have been zero shares purchased by insiders this year.
IPG Photonics reported the second-quarter financial results on July 30 with the following highlights:
|Net income||$41.7 million|
IPG Photonics' guidance for the third quarter of 2013 is as follows:
|Revenue||$165 million to $175 million|
|EPS||$0.77 to $0.87|
IPG Photonics has the second-highest P/S ratio among these four companies.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only IPG Photonics has seen intensive insider selling during the past 30 days.
There have been three different insiders selling IPG Photonics and there have not been any insiders buying IPG Photonics during the past 30 days. Two of these three insiders decreased their holdings by more than 10%. IPG Photonics has an insider ownership of 15.60%.
IPG Photonics is trading at a P/E ratio of 21.27 and a forward P/E ratio of 17.30. The company has a book value of $15.86 per share.
Before entering short IPG Photonics, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider selling activity.