Adobe: 4 Different Insiders Have Sold Shares This Month

| About: Adobe Systems (ADBE)

Summary

Four insiders sold Adobe stock within one month.

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

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

Adobe Systems Incorporated (NASDAQ:ADBE) operates as a diversified software company worldwide.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
John Warnock Co-Chairman March 24 50,000 No 761,211 shares 6.2%
James Daley Director March 20 5,000 No 15,086 shares + 10,000 options 16.6%
Mark Garrett CFO March 4 15,000 Yes 67,502 shares 18.2%
Shantanu Narayen CEO March 3 50,000 Yes 258,737 shares + 388,300 options 7.2%
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There have been 120,000 shares sold by insiders during the last 30 days. Mark Garrett and Shantanu Narayen 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 Adobe's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
March 2014 120,000 0
February 2014 65,000 0
January 2014 514,425 0
December 2013 163,010 0
November 2013 57,740 0
October 2013 6,175,000 0
September 2013 96,056 0
August 2013 65,000 0
July 2013 813,939 0
June 2013 450,276 0
May 2013 0 0
April 2013 324,073 0
March 2013 465,962 0
February 2013 0 0
January 2013 284,177 5,000
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There have been 9,594,658 shares sold, and there have been 5,000 shares purchased by insiders since January 2013.

Financials

Adobe reported the fiscal 2014 first-quarter, which ended February 28, financial results on March 18 with the following highlights:

Revenue $1.0 billion
Net income $47.0 million
Cash $3.1 billion
Debt $1.5 billion
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Two of these four insiders sold their shares after these results.

Adobe's revenues peaked in 2012.

Outlook

Adobe's guidance is as follows:

Q2/2014 FY2014
Revenue $1-$1.05 billion $4.1 billion
Non-GAAP EPS $0.26-$0.32 $1.10
GAAP EPS $0.06-$0.12 $0.27
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(Source: Earnings presentation)

Competition

Adobe's competitors include Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Autodesk (NASDAQ:ADSK). Here is a table comparing these companies.

Company ADBE AAPL MSFT ADSK
Market Cap: 32.24B 478.87B 334.52B 10.98B
Employees: 11,847 80,300 99,000 7,600
Qtrly Rev Growth (yoy): -0.01 0.06 0.14 -0.03
Revenue: 4.05B 173.99B 83.43B 2.27B
Gross Margin: 0.86 0.37 0.71 0.88
EBITDA: 752.51M 56.56B 31.83B 426.50M
Operating Margin: 0.11 0.28 0.34 0.13
Net Income: 271.91M 37.03B 22.82B 228.80M
EPS: 0.52 40.23 2.70 1.00
P/E: 124.77 13.34 14.93 48.34
PEG (5 yr expected): 4.77 0.59 1.96 4.01
P/S: 7.92 2.76 3.92 4.82
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Adobe has the 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
AAPL 0 8,712
MSFT 0 20,083,400
ADSK 0 1,072,679
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Autodesk has also seen intensive insider selling during the last 30 days.

Conclusion

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

Adobe has a $57 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $57 price target. I would place a stop loss at $71, which is the all-time high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, negative revenue growth, and the intensive insider-selling activity.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in ADBE, ADSK over 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.