PCTEL: 3 Different Insiders Have Sold Shares This Month

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 |  About: PCTEL, Inc. (PCTI)
by: Markus Aarnio

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%.

PCTEL (NASDAQ:PCTI) provides propagation and optimization solutions for the wireless industry worldwide.

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Insider selling during the last 30 days

Here is a table of PCTEL'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
Carl Thomsen Director Dec 18-26 26,500 Yes 11,734 shares + 3,500 options 63.5%
John Schoen CFO Dec 5-6 30,000 No 133,401 shares 18.4%
Martin Singer CEO Dec 3-5 62,624 No 249,253 shares 20.1%
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There have been 119,124 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 PCTEL's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
December 2013 119,124 0
November 2013 182,832 0
October 2013 0 0
September 2013 0 0
August 2013 35,412 0
July 2013 0 0
June 2013 5,761 0
May 2013 2,737 6,000
April 2013 0 0
March 2013 0 0
February 2013 10,000 0
January 2013 0 0
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There have been 355,866 shares sold, and there have been 6,000 shares purchased by insiders this year.

Financials

PCTEL reported the third-quarter financial results on October 30 with the following highlights:

Revenue $26.5 million
Net income $0.8 million
Cash $54.9 million
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(Source: November presentation)

Outlook

PCTEL anticipates fourth quarter revenue, gross profit margin, operating costs, and other income to be about the same as in the third quarter.

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(Source: November presentation)

PCTEL expects 10-12% annual organic revenue growth during the next three years.

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(Source: November presentation)

Competition

PCTEL's competitors include CommScope Holding Company (NASDAQ:COMM). Here is a table comparing these two companies.

Company PCTI COMM
Market Cap: 177.12M 3.39B
Employees: 467 N/A
Qtrly Rev Growth (yoy): 0.02 -0.01
Revenue: 104.13M 3.48B
Gross Margin: 0.40 0.34
EBITDA: 4.13M 654.12M
Operating Margin: -0.01 0.12
Net Income: -6.95M 39.76M
EPS: -0.31 0.25
P/E: N/A 73.41
P/S: 1.72 0.97
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PCTEL is trading at a higher P/S ratio than its direct competitor. In CommScope, there have been 10,913,983 shares sold, and there have been zero shares purchased by insiders this year. Only PCTEL has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling PCTEL, and there have not been any insiders buying PCTEL during the last 30 days. All three of these insiders decreased their holdings by more than 10%. PCTEL has an insider ownership of 2.20%.

Before entering short PCTEL, 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.