Pegasystems: 4 Different Insiders Have Sold Shares This Month

Nov.28.13 | About: Pegasystems Inc. (PEGA)

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%.

Pegasystems (NASDAQ:PEGA) develops, markets, licenses, and supports software to automate business processes primarily in the United States, the United Kingdom, and rest of Europe.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
William Wyman Director Nov 26-27 2,500 No 5,147 shares 32.7%
Leon Trefler SVP Nov 26 513 No 2,869 shares + 1,940 options 9.6%
Efstathios Kouninis VP Nov 14-15 1,090 No 0 shares 100%
Steven Kaplan Director Nov 14 8,086 No

28,083 shares + 10,000 options

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There have been 12,189 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 Pegasystems' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
November 2013 12,189 0
October 2013 0 0
September 2013 4,955 0
August 2013 6,060 0
July 2013 0 0
June 2013 0 0
May 2013 35,913 0
April 2013 0 0
March 2013 26,340 0
February 2013 5,614 0
January 2013 0 0
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There have been 91,071 shares sold and there have been zero shares purchased by insiders this year.


Pegasystems reported the third-quarter financial results on November 12 with the following highlights:

Revenue $122.0 million
Net income $8.7 million
Cash $188.4 million
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Pegasystems' license backlog totaled $268 million as of the end of the quarter, up $42 million or 19% from Q3 of last year.

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(Source: Investor presentation)


Pegasystems' competitors include Guidewire Software (NYSE:GWRE), and TIBCO Software (NASDAQ:TIBX). Here is a table comparing these companies.

Market Cap: 1.94B 2.72B 3.87B
Employees: 2,160 1,149 3,646
Qtrly Rev Growth (yoy): 0.20 0.43 0.06
Revenue: 499.40M 300.65M 1.05B
Gross Margin: 0.70 0.56 0.71
EBITDA: 80.88M 21.67M 195.10M
Operating Margin: 0.12 0.06 0.15
Net Income: 42.89M 15.38M 88.26M
EPS: 1.10 0.25 0.53
P/E: 46.52 187.72 45.34
PEG (5 yr expected): 1.40 17.25 2.08
P/S: 3.82 8.99 3.69
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Pegasystems has the second-lowest 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
GWRE 0 3,068,851
TIBX 0 1,237,932
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Guidewire has also seen intensive insider selling during the last 30 days.


There have been four different insiders selling Pegasystems and there have not been any insiders buying Pegasystems during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Pegasystems has an insider ownership of 54.31%.

There is one analyst buy rating, three neutral ratings, and zero sell ratings with an average price target of $47.50. Pegasystems is trading at a P/E ratio of 46.52 and a forward P/E ratio of 33.95. The company has a book value of $6.72 per share and the stock has a dividend yield of 0.24%.

Before entering short Pegasystems, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are bearish analyst price targets, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.