Yelp: 4 Different Insiders Have Sold Shares This Month

Apr.28.14 | About: Yelp (YELP)

Summary

4 insiders sold Yelp stock within one month.

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

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

Yelp Inc. (NYSE:YELP) operates as an online local guide that connects people primarily with boutiques, mechanics, restaurants, and dentists.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Jeremy Stoppelman CEO April 15-23 27,028 Yes 4,647,482 shares 0.6%
Robert Krolik CFO April 21 17,500 Yes 68,243 shares + 40,000 options 13.9%
Geoffrey Donaker COO April 10 25,000 Yes 0 shares + 1,025,514 options 2.4%
Joseph Nachman SVP April 7 45,000 Yes 0 shares + 234,884 options 16.1%
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There have been 114,528 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 Yelp's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
April 2014 114,528 0
March 2014 75,250 0
February 2014 153,680 0
January 2014 47,750 0
December 2013 644,224 0
November 2013 247,366 0
October 2013 239,246 0
September 2013 290,650 0
August 2013 9,183,408 0
July 2013 336,650 0
June 2013 409,246 0
May 2013 2,307,906 0
April 2013 300,759 0
March 2013 778,650 0
February 2013 1,125,811 0
January 2013 53,130 0
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There have been 16,308,254 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Yelp reported the full-year 2013 financial results on February 5 with the following highlights:

Revenue $233.0 million
Net loss $10.1 million
Cash $389.8 million
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The four insiders sold their shares after these results.

Outlook

Yelp's guidance is as follows:

Q1/2014 FY2014
Revenue $73.5-$74.5 million $353-$358 million
Adjusted EBITDA $8-$9 million $54-$58 million
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Competition

Yelp's competitors include Yahoo! (NASDAQ:YHOO) and Google (NASDAQ:GOOG). Here is a table comparing these three companies.

Company YELP GOOG YHOO
Market Cap: 4.11B 348.14B 35.56B
Employees: 1,984 49,829 12,200
Qtrly Rev Growth (yoy): 0.72 0.10 -0.01
Revenue: 232.99M 62.29B 4.67B
Gross Margin: 0.93 N/A 0.72
EBITDA: 907.00K 18.58B 887.32M
Operating Margin: -0.03 0.23 0.09
Net Income: -10.07M 12.34B 1.29B
EPS: -0.15 19.09 1.20
P/E: N/A 27.04 28.76
PEG (5 yr expected): -26.68 N/A 2.67
P/S: 19.20 5.69 7.78
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Yelp has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider activities during the last 30 days.

Company Insider buying / shares Insider selling / shares
GOOG 0 265,173
YHOO 0 72,195
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Only Yelp has seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Yelp, and there have not been any insiders buying Yelp during the last 30 days. Two of these four insiders decreased their holdings by more than 10%. Yelp has an insider ownership of 11.16%.

Yelp has a $47 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $47 price target. I would place a stop loss at $102, 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, negative earnings, 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 YELP 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.