Stamps.com: 4 Different Insiders Have Sold Shares During The Last 30 Days

Dec.26.13 | About: Stamps.com Inc. (STMP)

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%.

Stamps.com (NASDAQ:STMP) provides Internet-based postage solutions.

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Insider selling during the last 30 days

Here is a table of Stamps.com'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
James Bortnak Co-President Dec 20 2,777 Yes 0 shares + 11,703 options 19.2%
Ken McBride Chairman and CEO Dec 20 6,944 Yes 5,448 shares + 34,723 options 14.7%
John Clem Chief Product & Strategy Officer Nov 27 2,777 No 1,543 shares + 16,667 options 13.2%
JP Leon VP Nov 26 6,400 No 5,951 shares + 12,594 options 25.7%
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There have been 18,898 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 Stamps.com's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
December 2013 9,721 0
November 2013 32,094 0
October 2013 120,376 0
September 2013 131,607 0
August 2013 199,043 0
July 2013 12,778 0
June 2013 19,809 0
May 2013 37,778 0
April 2013 71,556 0
March 2013 0 0
February 2013 6,777 0
January 2013 2,778 0
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There have been 644,317 shares sold and there have been zero shares purchased by insiders this year.

Financials

Stamps.com reported the third-quarter financial results on October 23 with the following highlights:

Revenue $31.2 million
Net income $8.8 million
Cash $83.5 million
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STMP Revenue (Quarterly YoY Growth) Chart

STMP Revenue (Quarterly YoY Growth) data by YCharts

Stamps.com's revenue growth has been slowing down.

Outlook

Stamps.com's 2013 full-year guidance is as follows:

Revenue $125-$135 million
GAAP net income $1.93-$2.13 per share
Non-GAAP net income $2.20-$2.40 per share
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Competition

Stamps.com's competitors include Pitney Bowes (NYSE:PBI). Here is a table comparing these two companies.

Company STMP PBI
Market Cap: 691.17M 4.66B
Employees: 233 27,400
Qtrly Rev Growth (yoy): 0.08 -0.01
Revenue: 125.53M 4.84B
Gross Margin: 0.77 0.49
EBITDA: 34.30M 933.03M
Operating Margin: 0.25 0.14
Net Income: 34.58M 348.43M
EPS: 2.14 0.81
P/E: 20.06 28.63
PEG (5 yr expected): 0.90 -1.07
P/S: 5.50 0.96
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Stamps.com is trading at a higher P/S ratio than Pitney Bowes. In Pitney Bowes, there have been zero shares sold and there have been 91,000 shares purchased by insiders this year. Only Stamps.com has seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Stamps.com and there have not been any insiders buying Stamps.com during the last 30 days. All four of these insiders decreased their holdings by more than 10%. Stamps.com has an insider ownership of 1.80%.

Stamps.com has a $34 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $34 price target. I would place a stop loss at $49, which is the 13-year high. The four main reasons for the proposed short entry are bearish Point and Figure chart, relatively high P/S ratio, weak revenue growth, and the intensive insider-selling activity.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in STMP 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.