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%.
Tyler Technologies (NYSE:TYL) provides integrated information management solutions and services for the public sector with a focus on local governments in the United States and internationally.
Insider selling during the last 30 days
Here is a table of Tyler'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|
|Brian Miller||CFO||Nov 19-Dec 12||78,334||No||61,901 shares + 19,200 options||49.1%|
|Dustin Womble||EVP||Dec 13||12,500||No||161,694 shares + 36,500 options||5.9%|
|John Marr||CEO||Nov 18-Dec 11||77,379||No||450,592 shares||14.7%|
|Stuart Reeves||Director||Nov 21||10,000||No|
There have been 178,213 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 Tyler's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 913,816 shares sold and there have been zero shares purchased by insiders this year. The month of November has seen the most insider selling.
Tyler reported the third-quarter financial results on October 23 with the following highlights:
|Net income||$11.0 million|
Tyler's guidance for the full-year 2013 is as follows:
Tyler's competitors include CACI International (NYSE:CACI). Here is a table comparing these two companies.
Tyler is trading at a higher P/S ratio than its direct competitor. In CACI, there have been 112,538 shares sold and there have been 105,209 shares purchased by insiders this year. Only Tyler has seen intensive insider selling during the last 30 days.
There have been four different insiders selling Tyler and there have not been any insiders buying Tyler during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Tyler has an insider ownership of 2.00%.
Tyler is trading at a P/E ratio of 92.20 and a forward P/E ratio of 52.72. The company has a book value of $6.48 per share. Before entering short Tyler, 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.