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:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
Linear Technology Corporation (NASDAQ:LLTC) designs, manufactures, and markets a line of analog integrated circuits worldwide.
Insider selling during the last 30 days
Here is a table of Linear Technology'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|
|Donald Paulus||VP||Jan 21||30,000||No||93,896 shares + 52,000 options||17.1%|
|Paul Coghlan||CFO||Jan 22||10,000||No||478,783 shares + 95,000 options||1.7%|
|Alexander McCann||COO||Jan 17||27,745||No||86,357 shares||24.3%|
|David Quarles||VP||Jan 17||2,000||No||59,980 shares||3.2%|
There have been 69,745 shares sold by insiders during the last 30 days.
Insider selling by calendar month
Here is a table of Linear Technology's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 1,168,374 shares sold, and there have been zero shares purchased by insiders since January 2013.
Linear Technology reported the fiscal 2014 second-quarter, which ended December 29, financial results on January 14 with the following highlights:
|Net income||$104.8 million|
Linear Technology is forecasting revenues to grow sequentially by 3% to 6% in the fiscal third quarter.
|Qtrly Rev Growth (yoy):||0.10||-0.02||-0.06||-0.04|
|PEG (5 yr expected):||2.10||2.03||2.47||1.97|
Linear Technology has the highest P/S ratio among these four companies.
Here is a table of these competitors' insider-trading activities during the last 12 months.
|Company||Insider buying / shares||Insider selling / shares|
Analog Devices has also seen intensive insider selling during the last 30 days.
There have been four different insiders selling Linear Technology, and there have not been any insiders buying Linear Technology during the last 30 days. Two of these four insiders decreased their holdings by more than 10%. Linear Technology has an insider ownership of 0.80%.
Before going short Linear Technology, 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.