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%.
Qualcomm (QCOM) designs, develops, manufactures, and markets digital telecommunications products and services.
Insider selling during the last 30 days
Here is a table of Qualcomm's insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Paul Jacobs||CEO||Oct 22-Nov 1||69,842||Yes||1,280,851 shares + 210,447 options||4.5%|
|Margaret Johnson||EVP||Nov 1||6,000||Yes||24,129 shares + 9,724 options||15.1%|
|Derek Aberle||EVP||Nov 4||3,750||Yes||2,451 shares + 3,750 options||37.7%|
|Matthew Grob||EVP||Oct 7-Nov 1||30,700||Yes||14,484 shares + 37,500 options||37.1%|
|Cristiano Amon||EVP||Oct 31||7,000||Yes||287 shares + 14,000 options||32.9%|
|Steven Mollenkopf||COO||Oct 11||4,917||Yes||21,540 shares + 4,917 options||15.7%|
|Steven Altman||Vice Chairman||Oct 7||9,083||Yes||80,113 shares + 9,084 options||9.2%|
There have been 131,292 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 Qualcomm's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 3,229,100 shares sold and there have been zero shares purchased by insiders this year.
Qualcomm reported the fiscal 2013 full-year, which ended September 29, financial results on November 6 with the following highlights:
|Net income||$6.9 billion|
Qualcomm's guidance is as follows:
|Revenue||$6.3-$6.9 billion||$26.0-$27.5 billion|
|GAAP Diluted EPS||$0.92-$1.02||$4.25-$4.45|
(Source: Earnings presentation)
Qualcomm has the highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Texas Instruments has also seen intensive insider selling during the past 30 days.
There have been seven different insiders selling Qualcomm and there have not been any insiders buying Qualcomm during the past 30 days. Five of these seven insiders decreased their holdings by more than 10%. Qualcomm has an insider ownership of 1.25%.
Qualcomm is trading at a P/E ratio of 30.52 and a forward P/E ratio of 14.00. The company has a book value of $21.76 per share and the stock has a dividend yield of 2.03%.
Before entering short Qualcomm, 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/S ratio and the intensive insider selling activity.