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%.
Stamps.com (NASDAQ:STMP) provides Internet-based postage solutions.
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%|
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|
There have been 644,317 shares sold and there have been zero shares purchased by insiders this year.
Stamps.com reported the third-quarter financial results on October 23 with the following highlights:
|Net income||$8.8 million|
Stamps.com's revenue growth has been slowing down.
Stamps.com's 2013 full-year guidance is as follows:
|GAAP net income||$1.93-$2.13 per share|
|Non-GAAP net income||$2.20-$2.40 per share|
Stamps.com's competitors include Pitney Bowes (NYSE:PBI). Here is a table comparing these two companies.
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.
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.
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.