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%.
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.
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
|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%|
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|
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.
Synaptics reported the fiscal 2014 second-quarter, which ended December 31, financial results on January 23 with the following highlights:
|Net income||$17.3 million|
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."
|Qtrly Rev Growth (yoy):||0.44||-0.01||-0.07|
|PEG (5 yr expected):||1.09||1.59||4.54|
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|
Only Synaptics has seen intensive insider selling during the last 30 days.
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.