Compuware: 7 Different Insiders Have Sold Shares This Month

| About: Compuware Corporation (CPWR)

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%.

Compuware Corporation (NASDAQ:CPWR) provides services, software, and practices for information technology organizations worldwide.

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Insider selling during the last 30 days

Here is a table of Compuware'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
Joseph Angileri CFO Dec 2-26 135,000 Yes 176,955 shares + 2,780,000 options 4.4%
Faye Nelson Director Dec 12 10,000 No 7,730 shares 56.4%
William Grabe Director Dec 9 40,000 No 137,246 shares 22.6%
John Van Siclen SVP Dec 9 20,000 Yes 2,130 shares + 360,000 options 5.2%
Robert Paul CEO Dec 2-9 100,000 Yes 146,139 shares + 110,000 options 28.1%
Dennis Archer Director Dec 5 10,000 No 200 shares 98.0%
Daniel Follis SVP Dec 2 10,000 Yes 30,600 shares + 191,120 options 4.3%
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There have been 325,000 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 Compuware's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
December 2013 325,000 0
November 2013 120,000 0
October 2013 95,000 0
September 2013 28,722 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 568,722 shares sold, and there have been zero shares purchased by insiders this year. The month of December has seen the most insider selling.

Financials

Compuware reported the fiscal 2014 second-quarter, which ended September 30, financial results on October 24 with the following highlights:

Revenue $228.1 million
GAAP net income $16.3 million
Cash $50.4 million
Debt $14.0 million
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Outlook

Compuware's fiscal 2014 guidance is as follows:

EPS $0.31-$0.33
Non-GAAP EPS $0.47-$0.49
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(Source: Earnings presentation)

Competition

Compuware's competitors include Hewlett-Packard (NYSE:HPQ), CA Technologies (NASDAQ:CA), and International Business Machines (NYSE:IBM). Here is a table comparing these companies.

Company CPWR HPQ CA IBM
Market Cap: 2.44B 53.84B 15.19B 202.41B
Employees: 4,491 N/A 13,600 434,246
Qtrly Rev Growth (yoy): 0.03 -0.03 -0.01 -0.04
Revenue: 953.41M 112.30B 4.61B 101.36B
Gross Margin: 0.63 0.23 0.86 0.49
EBITDA: 135.25M 12.75B 1.59B 25.94B
Operating Margin: 0.10 0.07 0.31 0.21
Net Income: -12.01M 5.11B 1.06B 16.13B
EPS: -0.06 2.62 2.34 14.44
P/E: N/A 10.71 14.38 12.91
PEG (5 yr expected): N/A -3.22 N/A N/A
P/S: 2.58 0.48 3.27 1.98
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Compuware has the second-highest P/S ratio among these four companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
HPQ 0 119,342
CA

0

805,270
IBM 1,000 330,884
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Only Compuware has seen intensive insider selling during the last 30 days.

Conclusion

There have been seven different insiders selling Compuware, and there have not been any insiders buying Compuware during the last 30 days. Four of these seven insiders decreased their holdings by more than 10%. Compuware has an insider ownership of 0.30%.

Before entering short Compuware, 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.