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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%.

Procera Networks (NASDAQ:PKT) provides intelligent policy enforcement solutions based on deep packet inspection technology that enable mobile and broadband network operators and entities to manage and control their private networks.

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Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Charles ConstantiCFODec 6-Jan 212,500Yes42,800 shares22.6%
James BrearCEODec 9-1040,000Yes80,000 shares33.3%
Douglas MillerDirectorDec 6300No2,493 shares10.7%

There have been 52,800 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 Procera's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 20142,5000
December 201352,8000
November 20132,5000
October 20135,2500
September 20135,5000
August 20132,7500
July 201300
June 20132,7500
May 201300
April 201300
March 201300
February 20132,7500
January 20132,7500

There have been 79,550 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of December has seen the most insider selling.

Financials

Procera reported the third-quarter financial results on November 4 with the following highlights:

Revenue$21.3 million
GAAP net loss$3.0 million
Cash$108.9 million
Bookings$22.6 million

Outlook

On November 4, Procera reiterated its guidance for annual revenue growth of at least 30% for 2013.

Competition

Procera's competitors include Allot Communications (NASDAQ:ALLT), and Cisco Systems (NASDAQ:CSCO). Here is a table comparing these companies.

CompanyPKTALLTCSCO
Market Cap:298.27M495.23M117.63B
Employees:13644275,049
Qtrly Rev Growth (yoy):0.33-0.140.02
Revenue:69.91M95.64M48.82B
Gross Margin:0.560.720.61
EBITDA:-10.09M-3.87M14.06B
Operating Margin:-0.17-0.110.24
Net Income:-11.76M-22.70M9.89B
EPS:-0.59-0.701.84
P/E:N/AN/A11.96
P/S:4.375.172.46

Procera has the lowest gross margin among these three companies.

Here is a table of these competitors' insider-trading activities during the last 30 days.

CompanyInsider buying / sharesInsider selling / shares
ALLT00
CSCO

0

10,000

Only Procera has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Procera, and there have not been any insiders buying Procera during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Procera has an insider ownership of 0.60%.

Procera has a $7.5 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $7.5 price target. I would place a stop loss at $16.5, which is the six-month high. The three main reasons for the proposed short entry are bearish Point and Figure chart, negative earnings, and the intensive insider-selling activity.

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Source: Procera Networks: 3 Different Insiders Have Sold Shares During The Last 30 Days