Nvidia: 4 Different Insiders Have Sold Shares This Month

Mar.27.14 | About: Nvidia Corporation (NVDA)

Summary

Four insiders sold Nvidia stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

Three of these four insiders decreased their holdings by more than 10%.

Nvidia Corporation (NASDAQ:NVDA) is a visual computing company, connecting people through the powerful medium of computer graphics.

Click to enlarge

Insider selling during the last 30 days

Here is a table of Nvidia's insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Debora Shoquist EVP March 3-20 308,719 Yes 186,480 shares + 26,415 options 59.2%
David Shannon CAO March 3-18 67,605 Yes 225,901 shares + 2,664 options 22.8%
Michael Byron PAO March 4-7 4,800 Yes 27,688 shares 14.8%
Ajay Puri EVP March 4 14,274 No 185,027 shares 7.2%
Click to enlarge

There have been 395,398 shares sold by insiders during the last 30 days. Debora Shoquist, David Shannon, and Ajay Puri exercised options in March.

Debora Shoquist, David Shannon, and Michael Byron 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 Nvidia's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
March 2014 395,398 0
February 2014 50,458 0
January 2014 0 0
December 2013 0 0
November 2013 0 0
October 2013 0 0
September 2013 1,190 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 0
March 2013 743 0
February 2013 0 0
January 2013 0 0
Click to enlarge

There have been 447,789 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of March 2014 has seen the most insider selling.

Financials

Nvidia reported the fiscal 2014 full-year, which ended January 26, financial results on February 12 with the following highlights:

Revenue $4.1 billion
Net income $440.0 million
Cash $4.7 billion
Debt $1.4 billion
Click to enlarge

The four insiders sold their shares after these results.

Nvidia's trailing 12-month net income has been trending lower during the last 12 months.

Outlook

Nvidia's fiscal 2015 first-quarter guidance is as follows:

Revenue $1.05 billion, plus or minus two percent
GAAP gross margin 54.2%
GAAP operating expenses $454 million
Click to enlarge

Competition

Nvidia's competitors include Advanced Micro Devices (NASDAQ:AMD), Intel (NASDAQ:INTC), and Qualcomm (NASDAQ:QCOM). Here is a table comparing these companies.

Company NVDA AMD INTC QCOM
Market Cap: 10.23B 2.94B 124.90B 131.46B
Employees: 8,808 10,671 107,600 31,000
Qtrly Rev Growth (yoy): 0.03 0.38 0.03 0.10
Revenue: 4.13B 5.30B 52.71B 25.47B
Gross Margin: 0.55 0.37 0.60 0.60
EBITDA: 735.38M 308.00M 20.56B 8.49B
Operating Margin: 0.12 0.02 0.24 0.29
Net Income: 439.99M -83.00M 9.62B 6.39B
EPS: 0.74 -0.11 1.89 3.91
P/E: 24.93 N/A 13.29 19.89
PEG (5 yr expected): 2.59 0.55 2.75 1.01
P/S: 2.48 0.55 2.37 5.16
Click to enlarge

Nvidia has the second-highest P/S ratio among these four companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
AMD 0 0
INTC 0 890,316
QCOM 0 964,939
Click to enlarge

Intel and Qualcomm have also seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Nvidia, and there have not been any insiders buying Nvidia during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Nvidia has an insider ownership of 0.20%.

There are seven analyst buy ratings, 21 neutral ratings, and three sell ratings with an average price target of $17.66. Before going short Nvidia, I would like to get a bearish confirmation from the Point & Figure chart. The three main reasons for the proposed short entry are bearish analyst price targets, negative EPS 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.