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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%.

Xilinx (XLNX) designs and develops programmable devices and associated technologies worldwide.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Michael PattersonDirectorFeb 1320,000No8,400 shares + 16,000 options45.0%
Raja PetrakianSVPFeb 1321,875No20,422 shares + 50,000 options23.7%
Frank TornaghiSVPFeb 1210,000Yes

4,882 shares

67.2%
Jon OlsonCFOFeb 390,000Yes0 shares + 110,000 options45.0%
Moshe GavrielovCEOJan 22102,390Yes95,850 shares + 87,500 options35.8%

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.

MonthInsider selling / sharesInsider buying / shares
February 2014141,8750
January 2014102,3900
December 201300
November 2013102,6440
October 201312,0000
September 201335,6080
August 201324,7860
July 20131,240,1830
June 201318,7500
May 201373,5580
April 20133,6400
March 201322,3900
February 201348,6400
January 201356,6530

There have been 1,883,117 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Xilinx reported the fiscal 2014 third-quarter, which ended December 28, financial results on January 21 with the following highlights:

Revenue$586.8 million
Net income$175.9 million
Cash$2.5 billion
Debt$934.4 million

Outlook

Xilinx' guidance for the fiscal 2014 fourth quarter is as follows:

Sales growth+2% to +6% sequentially
Gross margin~68%

(click to enlarge)

(Source: Investor presentation)

Competition

Xilinx' competitors include Altera Corp. (ALTR) and Lattice Semiconductor Corporation (LSCC). Here is a table comparing these companies.

CompanyXLNXALTRLSCCIndustry Average (Semiconductor - Integrated Circuits)
Market Cap:13.31B11.05B894.50M275.42M
Employees:3,329N/AN/AN/A
Qtrly Rev Growth (yoy):0.150.030.360.00
Revenue:2.30B1.73B332.52M104.49M
Gross Margin:0.680.680.540.57
EBITDA:790.73M527.81M50.36M10.36M
Operating Margin:0.310.270.090.04
Net Income:604.98M440.07M22.32MN/A
EPS:2.141.360.190.15
P/E:23.2925.5640.6839.09
PEG (5 yr expected):2.073.851.251.04
P/S:5.816.372.562.64

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.

CompanyInsider buying / sharesInsider selling / shares
ALTR080,000
LSCC0168,000

Only Xilinx has seen intensive insider selling during the last 30 days.

Conclusion

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.

Source: Xilinx: 5 Different Insiders Have Sold Shares This Year