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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%.

Texas Instruments (NASDAQ:TXN) engages in the design, manufacture, sale of semiconductors to electronics designers and manufacturers worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
John SzczsponikSVPJan 23-28100,000No243,705 shares29.1%
Brian CrutcherSVPJan 2850,000No515,708 shares8.8%
Robert NovakSVPJan 2788,850No

105,928 shares + 75,985 options

32.8%
Gregory DelagiSVPJan 27100,000No345,392 shares + 221,397 options15.0%
Melendy LovettSVPJan 2430,000No65,455 shares31.4%

There have been 368,850 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Texas Instruments' insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2014368,8500
December 201300
November 201327,5500
October 2013303,1250
September 201335,0000
August 201350,1000
July 20131,265,6250
June 201300
May 2013905,1020
April 2013627,1750
March 20135,0000
February 2013448,4010
January 2013629,8470

There have been 4,665,775 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Texas Instruments reported the full-year 2013 financial results on January 21 with the following highlights:

Revenue$12.2 billion
Net income$2.2 billion
Cash$3.8 billion
Debt$5.2 billion

Outlook

Texas Instruments' guidance for the first quarter is as follows:

Revenue$2.83-$3.07 billion
EPS$0.36-$0.44

Competition

Texas Instruments' competitors include Qualcomm (NASDAQ:QCOM), and STMicroelectronics (NYSE:STM). Here is a table comparing these companies.

CompanyTXNQCOMSTM
Market Cap:46.45B121.62B7.09B
Employees:N/A31,00048,460
Qtrly Rev Growth (yoy):0.020.33-0.07
Revenue:12.20B24.87B8.23B
Gross Margin:0.520.610.32
EBITDA:4.20B8.58B475.00M
Operating Margin:0.240.30-0.05
Net Income:2.13B6.85B-892.00M
EPS:1.913.91-1.01
P/E:22.4618.41N/A
PEG (5 yr expected):1.900.85-6.37
P/S:3.814.890.86

Texas Instruments 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.

CompanyInsider buying / sharesInsider selling / shares
QCOM03,762,297
STMN/AN/A

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

Conclusion

There have been five different insiders selling Texas Instruments, and there have not been any insider buying Texas Instruments during the last 30 days. Four of these five insiders decreased their holdings by more than 10%. Texas Instruments has an insider ownership of 0.30%.

Before going short Texas Instruments, I would like to get a bearish confirmation from the Point and Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.

Source: Texas Instruments: 5 Different Insiders Have Sold Shares This Year