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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%.

Trimble Navigation (NASDAQ:TRMB) designs and distributes positioning products and applications enabled by global positioning system, optical, laser, and wireless communications technology.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
William HartDirectorFeb 13-146,000No211,804 shares2.8%
Julie ShepardVPFeb 1228,000Yes3,048 shares90.2%
Mark HarringtonVPFeb 1229,460Yes6,180 shares + 49,500 options34.6%
Jurgen KliemVPFeb 1242,000Yes350 shares + 28,000 options59.7%
James VenezianoVPFeb 1224,641Yes40,625 shares + 15,694 options30.4%

There have been 130,101 shares sold by insiders during the last 30 days. Julie Shepard, Mark Harrington, Jurgen Kliem, and James Veneziano 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 Trimble's insider-trading activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
February 2014130,1010
January 201451,2000
December 201354,9170
November 2013241,0260
October 201324,0420
September 20137,9580
August 2013113,0001,913
July 201300
June 201300
May 2013452,2340
April 201300
March 201300
February 2013160,0000
January 201319,6000

There have been 1,254,078 shares sold, and there have been 1,913 shares purchased by insiders since January 2013.

Financials

Trimble reported the full-year 2013 financial results on February 11 with the following highlights:

Revenue$2.3 billion
Net income$218.9 million
Cash$147.2 million
Debt$758.5 million

Outlook

Trimble's first-quarter guidance is as follows:

Revenue$610-$630 million
GAAP EPS$0.23-$0.26

Competition

Trimble's competitors include Garmin (NASDAQ:GRMN). Here is a table comparing these two companies.

CompanyTRMBGRMN
Market Cap:9.60B9.00B
Employees:N/A9,777
Qtrly Rev Growth (yoy):0.16-0.04
Revenue:2.29B2.64B
Gross Margin:0.560.53
EBITDA:449.64M641.04M
Operating Margin:0.110.21
Net Income:218.85M578.12M
EPS:0.842.94
P/E:44.2515.67
PEG (5 yr expected):1.532.58
P/S:4.173.42

Trimble has a higher P/S ratio than Garmin. In Garmin, there have been 55,995 shares sold, and there have been zero shares purchased by insiders during the last six months. Only Trimble has seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling Trimble, and there have not been any insiders buying Trimble during the last 30 days. Four of these five insiders decreased their holdings by more than 10%. Trimble has an insider ownership of 0.10%.

Before going short Trimble, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are relatively high P/S ratio, relatively high P/E ratio, and the intensive insider-selling activity.

Source: Trimble Navigation: 5 Different Insiders Have Sold Shares This Month