In this article, I will feature one services sector 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%.
Rocket Fuel (NASDAQ:FUEL) provides artificial-intelligence digital advertising solutions.
Insider selling during the last 30 days
Here is a table of Rocket Fuel's insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Public Offering||Current Ownership||Decrease In Ownership|
|John Gardner||Director||Feb 5||407,693||Yes||2,287,515 shares||15.1%|
|Abhinav Gupta||VP||Feb 5||186,855||Yes||674,812 shares + 360,000 options||15.3%|
|Monte Zweben||Director||Feb 5||12,996||Yes||1,872 shares + 125,870 options||9.2%|
|George John||CEO||Feb 5||307,877||Yes||2,251,924 shares||12.0%|
|Dominic Trigg||VP||Feb 5||9,115||Yes||0 shares + 115,885 options||7.3%|
|Richard Frankel||President||Feb 5||254,323||Yes||2,031,000 shares + 626,344 options||8.7%|
|Peter Bardwick||CFO||Feb 5||17,500||Yes||0 shares + 282,500 options||5.8%|
|Ninth MDW Partners||10% Owner||Jan 30||1,656,776||No||9,295,955 shares||15.1%|
There have been 2,853,135 shares sold by insiders during the last 30 days.
Insider selling by calendar month
Here is a table of Rocket Fuel's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 3,408,905 shares sold, and there have been zero shares purchased by insiders since September 2013.
Rocket Fuel reported the third-quarter financial results on November 7 with the following highlights:
|Net loss||$6.9 million|
Rocket Fuel reported preliminary full-year 2013 financial results on January 22 with the following highlights:
|Net loss||$23.8 to $22.1 million|
Rocket Fuel provided the following guidance on January 22:
|Revenue||$73-$76 million||$420-$435 million|
|Adjusted EBITDA||-$9.0 to -$7.5 million||$3-$6 million|
|Qtrly Rev Growth (yoy):||1.32||0.63||0.17||-0.06|
|PEG (5 yr expected):||0.60||1.62||1.34||3.30|
Rocket Fuel has the lowest gross margin among these four companies.
Here is a table of these competitors' insider-trading activities during the last 30 days.
|Company||Insider buying / shares||Insider selling / shares|
Facebook has also seen intensive insider selling during the last 30 days.
There have been eight different insiders selling Rocket Fuel, and there have not been any insiders buying Rocket Fuel during the last 30 days. Four of these eight insiders decreased their holdings by more than 10%. Rocket Fuel has an insider ownership of 12.30%.
Rocket Fuel has a $42 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $42 price target. I would place a stop loss at $72, which is the all-time high. The three main reasons for the proposed short entry are bearish Point and Figure chart, negative earnings, and the intensive insider-selling activity.