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%.
Ultra Clean Holdings (NASDAQ:UCTT) designs, develops, prototypes, engineers, manufactures, and tests subsystems tailored to specific steps in the semiconductor manufacturing process and manufacturing processes in other industries.
Insider selling during the last 30 days
Here is a table of Ultra Clean'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|
|AIT Holding||10% Owner||Dec 27-Jan 16||519,001||No||3,053,970 shares||14.5%|
|Lavi Lev||SVP||Jan 14||2,986||Yes||46,999 shares||6.0%|
|Clarence Granger||CEO||Jan 14||100,000||Yes||319,751 shares + 20,834 options||22.7%|
|Bruce Wier||SVP||Jan 10-14||38,057||Yes||75,510 shares||33.5%|
There have been 660,044 shares sold by insiders during the last 30 days. Lavi Lev, Clarence Granger, and Bruce Wier sold shares pursuant to a Rule 10b5-1 plan. 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 Ultra Clean's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 1,839,087 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of January 2014 has seen the most insider selling.
Ultra Clean reported the third-quarter financial results on October 21 with the following highlights:
|Net income||$2.0 million|
Ultra Clean's fourth-quarter guidance is as follows:
|Gross profit margin||16.5%-17%|
|Qtrly Rev Growth (yoy):||0.08||0.09||-0.03|
|PEG (5 yr expected):||2.33||2.18||0.88|
Ultra Clean has the second-highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities during the last 12 months.
|Company||Insider buying / shares||Insider selling / shares|
Only Ultra Clean has seen intensive insider selling during the last 30 days.
There have been four different insiders selling Ultra Clean, and there have not been any insiders buying Ultra Clean during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Ultra Clean has an insider ownership of 13.80%.
There are four analyst buy ratings, one neutral rating, and zero sell ratings with an average price target of $11.58. Before going short Ultra Clean, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are bearish analyst price targets, 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.