In this article, I will feature one business services company 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%.
Synnex Corporation (NYSE:SNX) provides distribution and business process outsourcing services to resellers, retailers, and original equipment manufacturers primarily in North America.
Insider selling during the last 30 days
Here is a table of Synnex' insider-trading activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Silver Star Developments||10% Owner||Oct 1-31||317,488||No||5,551,764 shares||5.4%|
|Dwight Steffensen||Director||Oct 4||10,000||No||5,707 shares||63.7%|
|Simon Leung||SVP||Oct 1||4,246||No||19,330 shares + 2,661 options||16.2%|
|Peter Larocque||President||Oct 1||15,000||No||44,916 shares + 3,983 options||23.5%|
There have been 346,734 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 Synnex' insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 444,786 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling.
Synnex reported the fiscal 2013 third-quarter, which ended August 31, financial results on September 25 with the following highlights:
|Net income||$46.6 million|
Synnex' guidance for the fiscal 2013 fourth quarter is as follows:
|Net income||$43.0-$44.4 million|
Synnex has the highest P/E 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 Synnex has seen intensive insider selling during the past 30 days.
There have been four different insiders selling Synnex and there have not been any insiders buying Synnex during the past 30 days. Three of these four insiders decreased their holdings by more than 10%. Synnex has an insider ownership of 17.50%.
Synnex is trading at a P/E ratio of 19.67 and a forward P/E ratio of 13.20. Synnex has a book value of $36.96 per share.
Before entering short Synnex, 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/E ratio and the intensive insider selling activity.