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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%.

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

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Carl ThomsenDirectorDec 18-2626,500Yes11,734 shares + 3,500 options63.5%
John SchoenCFODec 5-630,000No133,401 shares18.4%
Martin SingerCEODec 3-562,624No249,253 shares20.1%

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.

MonthInsider selling / sharesInsider buying / shares
December 2013119,1240
November 2013182,8320
October 201300
September 201300
August 201335,4120
July 201300
June 20135,7610
May 20132,7376,000
April 201300
March 201300
February 201310,0000
January 201300

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

(click to enlarge)

(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.

(click to enlarge)

(Source: November presentation)

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

(click to enlarge)

(Source: November presentation)

Competition

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

CompanyPCTICOMM
Market Cap:177.12M3.39B
Employees:467N/A
Qtrly Rev Growth (yoy):0.02-0.01
Revenue:104.13M3.48B
Gross Margin:0.400.34
EBITDA:4.13M654.12M
Operating Margin:-0.010.12
Net Income:-6.95M39.76M
EPS:-0.310.25
P/E:N/A73.41
P/S:1.720.97

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.

Source: PCTEL: 3 Different Insiders Have Sold Shares This Month