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%.
Xilinx (XLNX) designs and develops programmable devices and associated technologies worldwide.
Insider selling during the last 30 days
Here is a table of Xilinx' insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Michael Patterson||Director||Feb 13||20,000||No||8,400 shares + 16,000 options||45.0%|
|Raja Petrakian||SVP||Feb 13||21,875||No||20,422 shares + 50,000 options||23.7%|
|Frank Tornaghi||SVP||Feb 12||10,000||Yes|
|Jon Olson||CFO||Feb 3||90,000||Yes||0 shares + 110,000 options||45.0%|
|Moshe Gavrielov||CEO||Jan 22||102,390||Yes||95,850 shares + 87,500 options||35.8%|
There have been 244,265 shares sold by insiders during the last 30 days. Frank Tornaghi, Jon Olson, and Moshe Gavrielov 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 Xilinx' insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 1,883,117 shares sold, and there have been zero shares purchased by insiders since January 2013.
Xilinx reported the fiscal 2014 third-quarter, which ended December 28, financial results on January 21 with the following highlights:
|Net income||$175.9 million|
Xilinx' guidance for the fiscal 2014 fourth quarter is as follows:
|Sales growth||+2% to +6% sequentially|
(Source: Investor presentation)
|Company||XLNX||ALTR||LSCC||Industry Average (Semiconductor - Integrated Circuits)|
|Qtrly Rev Growth (yoy):||0.15||0.03||0.36||0.00|
|PEG (5 yr expected):||2.07||3.85||1.25||1.04|
Xilinx has the second-highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities during the last three months.
|Company||Insider buying / shares||Insider selling / shares|
Only Xilinx has seen intensive insider selling during the last 30 days.
There have been five different insiders selling Xilinx, and there have not been any insiders buying Xilinx during the last 30 days. All five of these insiders decreased their holdings by more than 10%. Xilinx has an insider ownership of 0.10%.
Before going short Xilinx, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high P/S ratio, and the intensive insider-selling activity.