In this article, I will feature one services sector 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%.
RPX Corporation (RPXC) provides patent risk management solutions in the United States, Japan, and internationally.
Insider selling during the last 30 days
Here is a table of RPX'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|
|John Amster||CEO||Nov 26-Dec 13||34,400||Yes||1,776,565 shares||1.9%|
|Martin Roberts||SVP||Nov 22-Dec 11||8,095||Yes||19,680 shares + 56,574 options||9.6%|
|Geoffrey Barker||Director||Nov 20-Dec 10||74,001||Yes||1,002,363 shares||6.9%|
|Steven Swank||SVP||Nov 21-Dec 5||7,732||Yes|| |
0 shares + 31,517 options
|Mallun Yen||EVP||Dec 2||10,000||Yes||0 shares + 516,000 options||1.9%|
|Paul Scola||SVP||Nov 25||2,925||No||0 shares||100%|
There have been 137,153 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 RPX's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 3,080,201 shares sold and there have been 60,000 shares purchased by insiders this year.
RPX reported the third-quarter financial results on October 29 with the following highlights:
|Net income||$8.4 million|
RPX's guidance is as follows:
|Revenue||$60.2-$60.6 million||$237.4-$237.8 million|
|Net income (non-GAAP)||$9.2-$10.0 million||$52.2-$53.0 million|
RPX's competitors include Acacia Research Corporation (ACTG). Here is a table comparing these two companies.
RPX is trading at a higher P/S ratio than its direct competitor. In Acacia Research, there have been 191,991 shares sold and there have been zero shares purchased by insiders this year. Only RPX has seen intensive insider selling during the last 30 days.
There have been six different insiders selling RPX and there have not been any insiders buying RPX during the last 30 days. Two of these six insiders decreased their holdings by more than 10%. RPX has an insider ownership of 2.10%.
RPX is trading at a P/E ratio of 19.81 and a forward P/E ratio of 15.15. The company has a book value of $7.89 per share. Before entering short RPX, 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.