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

| About: Procera Networks, (PKT)

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 (NYSEMKT: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.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Charles Constanti CFO Dec 6-Jan 2 12,500 Yes 42,800 shares 22.6%
James Brear CEO Dec 9-10 40,000 Yes 80,000 shares 33.3%
Douglas Miller Director Dec 6 300 No 2,493 shares 10.7%
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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.

Month Insider selling / shares Insider buying / shares
January 2014 2,500 0
December 2013 52,800 0
November 2013 2,500 0
October 2013 5,250 0
September 2013 5,500 0
August 2013 2,750 0
July 2013 0 0
June 2013 2,750 0
May 2013 0 0
April 2013 0 0
March 2013 0 0
February 2013 2,750 0
January 2013 2,750 0
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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
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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.

Company PKT ALLT CSCO
Market Cap: 298.27M 495.23M 117.63B
Employees: 136 442 75,049
Qtrly Rev Growth (yoy): 0.33 -0.14 0.02
Revenue: 69.91M 95.64M 48.82B
Gross Margin: 0.56 0.72 0.61
EBITDA: -10.09M -3.87M 14.06B
Operating Margin: -0.17 -0.11 0.24
Net Income: -11.76M -22.70M 9.89B
EPS: -0.59 -0.70 1.84
P/E: N/A N/A 11.96
P/S: 4.37 5.17 2.46
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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.

Company Insider buying / shares Insider selling / shares
ALLT 0 0
CSCO

0

10,000
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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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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in PKT, over 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.