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%.
Trulia (TRLA) provides tools to research homes and neighborhoods for consumers through Web and mobile applications.
Insider selling during the last 30 days
Here is a table of Trulia'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|
|Gregory Waldorf||Director||Oct 30-Nov 15||130,496||Yes||48,623 shares||27.1%|
|Peter Flint||CEO||Oct 21-Nov 13||41,600||Yes||1,465,159 shares||2.8%|
|Robert Moles||Director||Nov 11||25,000||Yes||
0 shares + 45,100 options
|Sami Inkinen||Director||Oct 21-Nov 11||30,700||Yes||916,003 shares||3.2%|
|Paul Levine||COO||Nov 1||15,000||Yes||47,448 shares + 290,941 options||4.2%|
|Scott Darling||VP||Nov 1||3,000||Yes||0 shares + 66,008 options||4.3%|
|Daniele Farnedi||CTO||Nov 1||1,250||Yes||987 shares + 113,504 options||1.1%|
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.
|Month||Insider selling / shares||Insider buying / shares|
There have been 3,712,882 shares sold and there have been zero shares purchased by insiders this year.
Trulia reported the third-quarter financial results on October 29 with the following highlights:
|Net income||$7.0 million|
(Source: Earnings presentation)
Trulia's guidance for the fourth quarter of 2013 is as follows:
|Adjusted EBITDA||$6.6-$7.0 million|
(Source: Earnings presentation)
Trulia has the second-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|
Only Trulia has seen intensive insider selling during the last 30 days.
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.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in TRLA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.