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%.
NetSuite (NYSE:N) provides cloud-based financials/enterprise resource planning (ERP) software suites in the United States and internationally.
Insider selling during the last 30 days
Here is a table of NetSuite'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|
|Douglas Solomon||SVP||Nov 15-Dec 11||3,879||Yes||21,257 shares||15.4%|
|Ronald Gill||CFO||Nov 15-Dec 11||12,957||Yes||37,820 shares||25.5%|
|Zach Nelson||CEO||Nov 15-Dec 3||14,489||Yes||889,091 shares||1.6%|
|James McGeever||COO||Nov 15-Dec 3||13,930||Yes||236,527 shares||5.6%|
|Evan Goldberg||CTO||Nov 15-Dec 4||24,828||Yes|| |
|Timothy Dilley||EVP||Nov 15-Dec 4||33,893||Yes||23,445 shares + 14,274 options||47.3%|
There have been 103,976 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 NetSuite's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 1,652,868 shares sold and there have been zero shares purchased by insiders this year.
NetSuite reported the third-quarter financial results on October 24 with the following highlights:
|Net loss||$16.8 million|
NetSuite's guidance is as follows:
|Revenue||$110.5-$111.5 million||$410-$411 million||$525-$535 million|
There have been six different insiders selling NetSuite and there have not been any insiders buying NetSuite during the last 30 days. Three of these six insiders decreased their holdings by more than 10%. NetSuite has an insider ownership of 5.50%.
NetSuite is trading at a forward P/E ratio of 332.53 and the company has a book value of $2.80 per share. NetSuite has a $72 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $72 price target. I would place a stop loss at $114, which is the all-time high. The four main reasons for the proposed short entry are negative earnings, bearish Point and Figure chart, high P/S ratio, and the intensive insider-selling activity.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in N 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.