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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%.

Seagate Technology (NASDAQ:STX) designs, manufactures, and sells electronic data storage products.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Michael CannonDirectorFeb 725,228No12,837 shares66.3%
Stephen LuczoCEOFeb 660,000No1,697,601 shares3.4%
Jay GeldmacherDirectorFeb 44,000No9,798 shares29.0%
Chong Sup ParkDirectorJan 302,270No38,518 shares5.6%

There have been 91,498 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Seagate's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 201489,2280
January 20142,2700
December 201300
November 2013954,7721,742
October 201333,058,5000
September 201345,3610
August 201326,1210
July 2013372,3230
June 201311,5000
May 2013252,3830
April 201311,5000
March 201311,8600
February 2013200,2310
January 2013259,4990

There have been 35,295,548 shares sold, and there have been 1,742 shares purchased by insiders since January 2013.

Financials

Seagate reported the fiscal 2014 second-quarter, which ended December 27, financial results on January 27 with the following highlights:

Revenue$3.5 billion
Net income$428 million
Cash$2.3 billion
Debt$3.6 billion

STX Revenue (<a href=

Seagate's revenues peaked 12 months ago, but the stock price has advanced 47% during the last 12 months.

Outlook

In the fiscal 2014 third quarter, Seagate expects to achieve at least $3.4 billion in revenues and to maintain non-GAAP margins approximately flat sequentially.

Competition

Seagate's competitors include SanDisk (NASDAQ:SNDK), and Western Digital Corporation (NASDAQ:WDC). Here is a table comparing these companies.

CompanySTXSNDKWDC
Market Cap:16.23B16.28B20.05B
Employees:53,2004,63685,777
Qtrly Rev Growth (yoy):-0.070.28-0.06
Revenue:14.11B5.98B15.12B
Gross Margin:0.270.440.28
EBITDA:2.84B1.93B3.20B
Operating Margin:0.140.250.13
Net Income:1.68B918.42M956.00M
EPS:4.533.783.93
P/E:10.9019.1221.62
PEG (5 yr expected):3.460.516.26
P/S:1.172.621.31

Seagate has the lowest gross margin among these three companies.

Here is a table of these competitors' insider-trading activities during the last 30 days.

CompanyInsider buying / sharesInsider selling / shares
SNDK060,163
WDC06,016

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

Conclusion

There have been four different insiders selling Seagate, and there have not been any insiders buying Seagate during the last 30 days. Two of these four insiders decreased their holdings by more than 10%. Seagate has an insider ownership of 4.10%.

Before going short Seagate, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are negative revenue growth, 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.

Source: Seagate: 4 Different Insiders Have Sold Shares This Year