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%.
Monolithic Power Systems (MPWR), a fabless semiconductor company, designs, develops, and markets analog and mixed-signal semiconductors for the communications, computing, consumer, and industrial markets.
Insider selling during the last 30 days
Here is a table of Monolithic Power Systems' insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Herbert Chang||Director||Nov 6-29||34,643||No||11,119 shares||75.7%|
|Deming Xiao||President of MPS Asia Operations||Nov 6-26||8,396||No||60,026 shares||12.3%|
|James Moyer||Director||Nov 11-26||34,000||Yes||1,238,584 shares||2.7%|
|Saria Tseng||VP||Nov 5-22||12,858||No|
|Maurice Sciammas||SVP||Nov 4-13||28,549||Yes||110,292 shares||20.6%|
|Meera Rao||CFO||Nov 4-11||5,000||Yes||51,063 shares||8.9%|
There have been 123,446 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 Monolithic Power Systems' insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 1,844,562 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling.
Monolithic Power Systems reported the third-quarter financial results on October 24 with the following highlights:
|Net income||$7.4 million|
Monolithic Power Systems' guidance for the fourth quarter is as follows:
|GAAP R&D and SG&A expenses||$25.0-$26.8 million|
Monolithic Power Systems has the highest P/S 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 Monolithic Power Systems has seen intensive insider selling during the last 30 days.
There have been six different insiders selling Monolithic Power Systems and there have not been any insiders buying Monolithic Power Systems during the last 30 days. Four of these six insiders decreased their holdings by more than 10%. Monolithic Power Systems has an insider ownership of 4.30%.
Monolithic Power Systems is trading at a P/E ratio of 82.06 and a forward P/E ratio of 23.23. The company has a book value of $8.37 per share.
Before entering short Monolithic Power Systems, 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.