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%.
Trimble Navigation (TRMB) designs and distributes positioning products and applications enabled by global positioning system, optical, laser, and wireless communications technology.
Insider selling during the last 30 days
Here is a table of Trimble's insider-trading activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|William Hart||Director||Feb 13-14||6,000||No||211,804 shares||2.8%|
|Julie Shepard||VP||Feb 12||28,000||Yes||3,048 shares||90.2%|
|Mark Harrington||VP||Feb 12||29,460||Yes||6,180 shares + 49,500 options||34.6%|
|Jurgen Kliem||VP||Feb 12||42,000||Yes||350 shares + 28,000 options||59.7%|
|James Veneziano||VP||Feb 12||24,641||Yes||40,625 shares + 15,694 options||30.4%|
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.
|Month||Insider selling / shares||Insider buying / shares|
There have been 1,254,078 shares sold, and there have been 1,913 shares purchased by insiders since January 2013.
Trimble reported the full-year 2013 financial results on February 11 with the following highlights:
|Net income||$218.9 million|
Trimble's first-quarter guidance is as follows:
|Qtrly Rev Growth (yoy):||0.16||-0.04|
|PEG (5 yr expected):||1.53||2.58|
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.
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.