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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%.

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.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Brian MillerCFONov 19-Dec 1278,334No61,901 shares + 19,200 options49.1%
Dustin WombleEVPDec 1312,500No161,694 shares + 36,500 options5.9%
John MarrCEONov 18-Dec 1177,379No450,592 shares14.7%
Stuart ReevesDirectorNov 2110,000No

27,000 shares

27.0%

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.

MonthInsider selling / sharesInsider buying / shares
December 201381,9790
November 2013267,7030
October 201320,0000
September 201389,8000
August 2013165,7140
July 201340,1000
June 201360,2000
May 201357,3200
April 201300
March 2013111,0000
February 201320,0000
January 201300

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.

Financials

Tyler reported the third-quarter financial results on October 23 with the following highlights:

Revenue$107.0 million
Net income$11.0 million
Cash$52.1 million
Backlog$541.0 million

Outlook

Tyler's guidance for the full-year 2013 is as follows:

Revenue$412-$416 million
EPS$1.10-$1.15

Competition

Tyler's competitors include CACI International (NYSE:CACI). Here is a table comparing these two companies.

CompanyTYLCACI
Market Cap:3.31B1.70B
Employees:2,48214,900
Qtrly Rev Growth (yoy):0.14-0.07
Revenue:401.28M3.62B
Gross Margin:0.460.31
EBITDA:76.07M320.23M
Operating Margin:0.160.07
Net Income:37.97M148.97M
EPS:1.116.18
P/E:92.2011.75
PEG (5 yr expected):4.380.98
P/S:8.070.47

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.

Conclusion

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.

Source: Tyler Technologies: 4 Different Insiders Have Sold Shares During The Last 30 Days