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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%.

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

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Joseph AngileriCFODec 2-26135,000Yes176,955 shares + 2,780,000 options4.4%
Faye NelsonDirectorDec 1210,000No7,730 shares56.4%
William GrabeDirectorDec 940,000No137,246 shares22.6%
John Van SiclenSVPDec 920,000Yes2,130 shares + 360,000 options5.2%
Robert PaulCEODec 2-9100,000Yes146,139 shares + 110,000 options28.1%
Dennis ArcherDirectorDec 510,000No200 shares98.0%
Daniel FollisSVPDec 210,000Yes30,600 shares + 191,120 options4.3%

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.

MonthInsider selling / sharesInsider buying / shares
December 2013325,0000
November 2013120,0000
October 201395,0000
September 201328,7220
August 201300
July 201300
June 201300
May 201300
April 201300
March 201300
February 201300
January 201300

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

Outlook

Compuware's fiscal 2014 guidance is as follows:

EPS$0.31-$0.33
Non-GAAP EPS$0.47-$0.49

(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.

CompanyCPWRHPQCAIBM
Market Cap:2.44B53.84B15.19B202.41B
Employees:4,491N/A13,600434,246
Qtrly Rev Growth (yoy):0.03-0.03-0.01-0.04
Revenue:953.41M112.30B4.61B101.36B
Gross Margin:0.630.230.860.49
EBITDA:135.25M12.75B1.59B25.94B
Operating Margin:0.100.070.310.21
Net Income:-12.01M5.11B1.06B16.13B
EPS:-0.062.622.3414.44
P/E:N/A10.7114.3812.91
PEG (5 yr expected):N/A-3.22N/AN/A
P/S:2.580.483.271.98

Compuware has the second-highest P/S ratio among these four companies.

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

CompanyInsider buying / sharesInsider selling / shares
HPQ0119,342
CA

0

805,270
IBM1,000330,884

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.

Source: Compuware: 7 Different Insiders Have Sold Shares This Month