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

| About: Tyler Technologies, (TYL)

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.

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

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.

Month Insider selling / shares Insider buying / shares
December 2013 81,979 0
November 2013 267,703 0
October 2013 20,000 0
September 2013 89,800 0
August 2013 165,714 0
July 2013 40,100 0
June 2013 60,200 0
May 2013 57,320 0
April 2013 0 0
March 2013 111,000 0
February 2013 20,000 0
January 2013 0 0

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.

Company TYL CACI
Market Cap: 3.31B 1.70B
Employees: 2,482 14,900
Qtrly Rev Growth (yoy): 0.14 -0.07
Revenue: 401.28M 3.62B
Gross Margin: 0.46 0.31
EBITDA: 76.07M 320.23M
Operating Margin: 0.16 0.07
Net Income: 37.97M 148.97M
EPS: 1.11 6.18
P/E: 92.20 11.75
PEG (5 yr expected): 4.38 0.98
P/S: 8.07 0.47

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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.