Synaptics: 7 Different Insiders Have Sold Shares This Year

Feb. 1.14 | About: Synaptics Incorporated (SYNA)

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%.

Synaptics Incorporated (NASDAQ:SYNA) develops, markets, and sells custom-designed human interface solutions for electronic devices and products primarily in China, South Korea, Taiwan, Japan, and the United States.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Keith Geeslin Director Jan 28 18,750 No 15,436 shares 54.8%
Kevin Barber SVP Jan 8-28 32,500 Yes 5,286 shares + 48,375 options 37.7%
Bretton Sewell SVP Jan 24 14,250 Yes

14,069 shares + 50,600 options

18.1%
Russell Knittel Director Jan 2 - 15 364,126 Yes 11,596 shares + 598,800 options 37.4%
Alex Wong SVP Jan 10-15 9,500 Yes 18,822 shares + 6,600 options 27.2%
Francis Lee Director Jan 2-14 68,475 Yes 139,837 shares 32.9%
Kathleen Bayless CFO Jan 7 15,000 Yes 13,389 shares + 105,000 options 11.2%
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There have been 522,601 shares sold by insiders during the last 30 days. Kevin Barber, Bretton Sewell, Russell Knittel, Alex Wong, Francis Lee, and Kathleen Bayless 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 Synaptics' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
January 2014 522,601 0
December 2013 3,000 0
November 2013 121,000 0
October 2013 351,724 0
September 2013 58,000 0
August 2013 25,000 0
July 2013 0 0
June 2013 15,000 0
May 2013 376,642 0
April 2013 8,200 0
March 2013 62,189 0
February 2013 0 0
January 2013 0 0
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There have been 1,543,356 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.

Financials

Synaptics reported the fiscal 2014 second-quarter, which ended December 31, financial results on January 23 with the following highlights:

Revenue $205.8 million
Net income $17.3 million
Cash $369.4 million
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Outlook

Kathy Bayless, CFO, commented on January 23:

"Considering our backlog, customer forecasts, and the resulting expected product mix, we anticipate revenue to be in the range of $180 million to $200 million for the March quarter. The March quarter outlook reflects seasonality, with incremental revenue from our new Fingerprint ID products."

Competition

Synaptics' competitors include Atmel Corporation (NASDAQ:ATML), and Cypress Semiconductor Corporation (NASDAQ:CY). Here is a table comparing these companies.

Company SYNA ATML CY
Market Cap: 1.94B 3.56B 1.54B
Employees: 852 5,000 N/A
Qtrly Rev Growth (yoy): 0.44 -0.01 -0.07
Revenue: 821.88M 1.38B 722.69M
Gross Margin: 0.49 0.40 0.47
EBITDA: 166.14M 119.10M 6.40M
Operating Margin: 0.19 0.03 -0.06
Net Income: 134.04M -41.60M -46.36M
EPS: 3.81 -0.10 -0.31
P/E: 15.40 N/A N/A
PEG (5 yr expected): 1.09 1.59 4.54
P/S: 2.55 2.55 2.07
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Synaptics, together with Atmel, has the 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
ATML 0 2,354,455
CY 15,000 1,398,804
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Only Synaptics has seen intensive insider selling during the last 30 days.

Conclusion

There have been seven different insiders selling Synaptics, and there have not been any insiders buying Synaptics during the last 30 days. All seven of these insiders decreased their holdings by more than 10%. Synaptics has an insider ownership of 0.50%.

Before going short Synaptics, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are relatively high P/S ratio, weak guidance, 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.