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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%.

Skyworks Solutions (SWKS) offers analog and mixed signal semiconductors worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
David AldrichCEOJan 2-29225,919Yes332,723 shares40.4%
Timothy FureyDirectorJan 217,500No44,215 shares14.5%
Liam GriffinEVPJan 171,275Yes

52,126 shares

2.4%

There have been 234,694 shares sold by insiders during the last 30 days. David Aldrich and Liam Griffin 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 Skyworks' insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
January 2014234,6940
December 2013210,8240
November 2013300,0540
October 201351,1120
September 201354,0000
August 2013161,8850
July 201328,0000
June 201328,0000
May 201349,8280
April 201300
March 201300
February 201300
January 201300

There have been 1,118,397 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Skyworks reported the fiscal 2014 first-quarter, which ended December 27, financial results on January 16 with the following highlights:

Revenue$505.2 million
Net income$94.5 million
Cash$648.6 million

Outlook

Skyworks' fiscal 2014 second-quarter guidance is as follows:

Revenue$470 million
Non-GAAP EPS$0.59

Competition

Skyworks' competitors include Analog Devices (ADI), Avago Technologies (AVGO), and Hittite Microwave (HITT). Here is a table comparing these companies.

CompanySWKSADIAVGOHITT
Market Cap:5.63B15.01B13.60B1.76B
Employees:4,7509,2004,800486
Qtrly Rev Growth (yoy):0.13-0.020.190.02
Revenue:1.79B2.66B2.52B273.55M
Gross Margin:0.430.640.500.73
EBITDA:454.90M902.91M759.00M121.88M
Operating Margin:0.200.300.230.40
Net Income:278.10M644.65M552.00M72.10M
EPS:1.452.092.192.32
P/E:20.8623.1224.9524.72
PEG (5 yr expected):0.702.201.081.86
P/S:3.095.775.446.43

Skyworks has the lowest gross margin among these four companies.

Here is a table of these competitors' insider-trading activities during the last 12 months.

CompanyInsider buying / sharesInsider selling / shares
ADI01,125,469
AVGO0586,863
HITT080,292

Analog Devices has also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Skyworks, and there have not been any insiders buying Skyworks during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Skyworks has an insider ownership of 0.40%.

Before going short Skyworks, 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: Skyworks Solutions: 3 Different Insiders Have Sold Shares This Year