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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:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Trulia (NYSE:TRLA) provides tools to research homes and neighborhoods for consumers through Web and mobile applications.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Trulia's insider-trading activity during the last 30 days by insider.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Gregory WaldorfDirectorOct 30-Nov 15130,496Yes48,623 shares27.1%
Peter FlintCEOOct 21-Nov 1341,600Yes1,465,159 shares2.8%
Robert MolesDirectorNov 1125,000Yes

0 shares + 45,100 options

35.7%
Sami InkinenDirectorOct 21-Nov 1130,700Yes916,003 shares3.2%
Paul LevineCOONov 115,000Yes47,448 shares + 290,941 options4.2%
Scott DarlingVPNov 13,000Yes0 shares + 66,008 options4.3%
Daniele FarnediCTONov 11,250Yes987 shares + 113,504 options1.1%

There have been 247,046 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 Trulia's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
November 2013206,0220
October 2013101,5240
September 2013127,8740
August 2013268,6950
July 20131,2500
June 20131,2500
May 2013188,2500
April 201312,5000
March 20131,208,4560
February 20131,597,0610
January 201300

There have been 3,712,882 shares sold and there have been zero shares purchased by insiders this year.

Financials

Trulia reported the third-quarter financial results on October 29 with the following highlights:

Revenue$40.3 million
Net income$7.0 million
Cash$43.4 million
Debt$8.0 million

(click to enlarge)

(Source: Earnings presentation)

Outlook

Trulia's guidance for the fourth quarter of 2013 is as follows:

Revenue$48.5-$50.0 million
Adjusted EBITDA$6.6-$7.0 million

(click to enlarge)

(Source: Earnings presentation)

Competition

Trulia's competitors include Move (NASDAQ:MOVE), and Zillow (NASDAQ:Z). Here is a table comparing these companies.

CompanyTRLAMOVEZ
Market Cap:1.39B662.36M3.26B
Employees:519943787
Qtrly Rev Growth (yoy):1.170.190.67
Revenue:114.55M223.29M173.53M
Gross Margin:0.860.770.90
EBITDA:-2.55M15.27M-9.48M
Operating Margin:-0.080.01-0.10
Net Income:1.03M2.09M-14.62M
EPS:0.030.05-0.42
P/E:1,179.12346.12N/A
PEG (5 yr expected):3.14N/A90.88
P/S:12.092.9718.76

Trulia has the second-highest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

CompanyInsider buying / sharesInsider selling / shares
MOVE0453,615
Z03,354,765

Only Trulia has seen intensive insider selling during the last 30 days.

Conclusion

There have been seven different insiders selling Trulia and there have not been any insiders buying Trulia during the last 30 days. Two of these seven insiders decreased their holdings by more than 10%. Trulia has an insider ownership of 7.50%.

Trulia is trading at a P/E ratio of 1,179.12 and a forward P/E ratio of 53.31. The company has a book value of $11.90 per share.

Trulia has a $30 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $30 price target. I would place a stop loss at $53, which is the all-time high. The three main reasons for the proposed short entry are bearish Point and Figure chart, high P/E ratio, and the intensive insider selling activity.

Source: Insiders Are Selling Trulia