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%.
RealPage (NASDAQ:RP) provides on demand software solutions for the rental housing industry in North America.
Insider selling during the last 30 days
Here is a table of RealPage'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|
|Stephen Winn||CEO||Dec 4-23||80,000||Yes||26,088,388 shares||0.3%|
|William Chaney||EVP||Dec 12-13||7,000||No||53,659 shares||11.5%|
|Timothy Barker||CFO||Dec 12-13||49,550||No||190,212 shares + 25,450 options||18.7%|
There have been 136,550 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 RealPage's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 4,825,529 shares sold, and there have been zero shares purchased by insiders this year.
RealPage reported the third-quarter financial results on November 7 with the following highlights:
|GAAP revenue||$98.1 million|
|GAAP net income||$12.9 million|
RealPage's guidance is as follows:
|Non-GAAP revenue||$102.7-$104.2 million||$386.0-$387.5 million|
|Non-GAAP net income||$12.5-$13.1 million||$45.0-$45.6 million|
RealPage has the highest P/S ratio among these three companies. In CoreLogic, there have been 104,359 shares sold, and there have been 2,500 shares purchased by insiders this year. Only RealPage has seen intensive insider selling during the last 30 days.
There have been three different insiders selling RealPage, and there have not been any insiders buying RealPage during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. RealPage has an insider ownership of 32.50%.
Before entering short RealPage, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are relatively high P/S ratio, high P/E ratio, and the intensive insider-selling activity.