RealPage: 3 Different Insiders Have Sold Shares This Month

Dec.31.13 | About: RealPage (RP)

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%.

RealPage (NASDAQ:RP) provides on demand software solutions for the rental housing industry in North America.

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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%
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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
December 2013 136,550 0
November 2013 183,950 0
October 2013 68,500 0
September 2013 114,650 0
August 2013 1,392,295 0
July 2013 0 0
June 2013 23,000 0
May 2013 1,292,627 0
April 2013 3,400 0
March 2013 1,574,060 0
February 2013 24,486 0
January 2013 12,011 0
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There have been 4,825,529 shares sold, and there have been zero shares purchased by insiders this year.

Financials

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
Cash $44.0 million
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Outlook

RealPage's guidance is as follows:

Q4/2013 FY2013
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
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Competition

RealPage's competitors include Reed Elsevier (RUK), and CoreLogic (NYSE:CLGX). Here is a table comparing these companies.

Company RP RUK CLGX
Market Cap: 1.76B 17.43B 3.38B
Employees: 3,320 N/A 4,800
Qtrly Rev Growth (yoy): 0.18 0.06 -0.01
Revenue: 367.23M 5.26B 1.64B
Gross Margin: 0.61 0.65 0.46
EBITDA: 56.92M N/A 370.40M
Operating Margin: 0.07 0.22 0.15
Net Income: 22.24M 850.29M 146.07M
EPS: 0.29 2.82 1.38
P/E: 78.07 21.03 26.03
PEG (5 yr expected): N/A 3.09 N/A
P/S: 4.79 3.33 2.02
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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.

Conclusion

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.

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.