Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message|
( followers)  

Summary

  • 3 insiders sold Qualcomm stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • 2 of these 3 insiders decreased their holdings by more than 10%.

Qualcomm (NASDAQ:QCOM) designs, develops, manufactures, and markets digital telecommunications products and services.

(click to enlarge)

Insider selling during the last 30 days

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

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Paul JacobsExecutive ChairmanMar 27-Apr 4222,000Yes1,342,082 shares + 131,899 options13.1%
Margaret JohnsonEVPApril 12,400Yes24,320 shares + 18,419 options5.3%
Venkata RenduchintalaEVPMarch 3151,167Yes378 shares99.3%

There have been 275,567 shares sold by insiders during the last 30 days. All these shares were sold 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 Qualcomm's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 2014212,4000
March 2014312,6920
February 2014545,8220
January 2014169,5920
December 2013175,1910
November 2013880,7010
October 2013165,0090
September 2013379,4850
August 2013182,8690
July 2013193,0880
June 2013144,7830
May 2013335,7230
April 2013429,2500
March 2013412,2410
February 2013304,0570
January 2013626,0030

There have been 5,396,506 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Qualcomm reported the fiscal 2014 second-quarter, which ended March 30, financial results on April 23 with the following highlights:

Revenue$6.4 billion
Net income$2.0 billion
Cash$32.1 billion

(click to enlarge)

(Source: Earnings presentation)

Outlook

Qualcomm's guidance is as follows:

Q3/FY14FY14
Revenue$6.2-$6.8 billion$26.0-$27.5 billion
GAAP EPS$0.98-$1.08$4.37-$4.57

(click to enlarge)

(Source: Earnings presentation)

Competition

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

CompanyQCOMSSNLFINTC
Market Cap:131.24B170.19B130.62B
Employees:31,000N/A106,300
Qtrly Rev Growth (yoy):0.100.060.02
Revenue:25.47B219.54B52.89B
Gross Margin:0.60N/A0.61
EBITDA:8.49B50.80B20.66B
Operating Margin:0.290.160.24
Net Income:6.39B24.86B9.52B
EPS:3.91189.891.87
P/E:19.866.8514.05
PEG (5 yr expected):1.00N/A1.85
P/S:5.170.782.52

Qualcomm has the highest P/S ratio among these three companies.

Here is a table of Intel's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 201454,4790
March 2014135,4340
February 201425,7420
January 2014729,1400
December 201384,0120
November 201376,4270
October 2013893,2610
September 2013103,5550
August 2013614,0860
July 2013207,9460
June 2013698,8830
May 2013407,4160
April 2013110,4610
March 201387,6920
February 201338,9280
January 201347,2470

In Intel, there have been 4,314,709 shares sold, and there have been zero shares purchased by insiders since January 2013. Intel has also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Qualcomm, and there have not been any insiders buying Qualcomm during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Qualcomm has an insider ownership of 1.25%.

Qualcomm has a $72 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $72 price target. I would place a stop loss at $82, 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.

(click to enlarge)

Source: Qualcomm: 3 Different Insiders Have Sold Shares During The Last 30 Days