SanDisk: 4 Different Insiders Have Sold Shares This Month

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 |  About: SanDisk Corporation (SNDK)
by: Markus Aarnio

Summary

4 insiders sold SanDisk stock within one month.

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

All 4 of these insiders decreased their holdings by more than 10%.

SanDisk Corporation (NASDAQ:SNDK) designs, develops, manufactures, and markets flash storage card products that are used in various consumer electronics products.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Yehoshua Nir SVP April 24 780 No 3,762 shares 17.2%
Donald Robertson CAO April 23 1,380 No 4,345 shares 24.1%
Judy Bruner CFO April 21 39,300 Yes 45,875 shares + 39,600 options 31.5%
Sanjay Mehrotra CEO April 3-4 57,875 Yes 48,807 shares + 100 options 54.2%
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There have been 99,335 shares sold by insiders during the last 30 days. Judy Bruner and Sanjay Mehrotra 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 SanDisk's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
April 2014 99,335 0
March 2014 148,025 0
February 2014 155,212 0
January 2014 110,163 0
December 2013 67,000 0
November 2013 123,514 0
October 2013 228,843 0
September 2013 79,000 0
August 2013 113,677 0
July 2013 38,000 0
June 2013 32,000 0
May 2013 170,231 0
April 2013 32,000 0
March 2013 197,000 0
February 2013 129,265 0
January 2013 60,000 0
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There have been 1,783,265 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

SanDisk reported the first-quarter financial results on April 16 with the following highlights:

Revenue $1.5 billion
GAAP net income $268.9 million
Cash $2.8 billion
Debt $2.0 billion
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Three of these four insiders sold their shares after these results.

Outlook

SanDisk's guidance is as follows:

Q2/2014 FY2014
Revenue (GAAP) $1,550-$1,625 million $6.4-$6.8 billion
Gross margin (GAAP) 45%-47% 45%-47%
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Competition

SanDisk's competitors include Samsung (OTC:SSNLF), Intel (NASDAQ:INTC), and Micron (NASDAQ:MU). Here is a table comparing these companies.

Company SNDK SSNLF INTC MU
Market Cap: 19.05B 170.19B 130.62B 27.04B
Employees: 5,459 N/A 106,300 30,900
Qtrly Rev Growth (yoy): 0.13 0.06 0.02 0.98
Revenue: 6.34B 219.54B 52.89B 13.31B
Gross Margin: 0.49 N/A 0.61 0.30
EBITDA: 2.30B 50.80B 20.66B 4.03B
Operating Margin: 0.29 0.16 0.24 0.16
Net Income: 1.15B 24.86B 9.52B 2.84B
EPS: 4.81 189.89 1.87 2.48
P/E: 17.53 6.85 14.05 10.20
PEG (5 yr expected): 1.13 N/A 1.85 0.84
P/S: 3.03 0.78 2.52 2.10
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SanDisk 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
SSNLF N/A N/A
INTC

0

944,795
MU 0 1,847,191
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Intel and Micron have also seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling SanDisk, and there have not been any insiders buying SanDisk during the last 30 days. All four of these insiders decreased their holdings by more than 10%. SanDisk has an insider ownership of 0.24%.

SanDisk has a $62 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $62 price target. I would place a stop loss at $86, which is the all-time high. The four main reasons for the proposed short entry are a bearish Point & Figure chart, relatively high P/S ratio, relatively high P/E ratio, 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 SNDK 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.