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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.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Jeremy StoppelmanCEOApril 15-2327,028Yes4,647,482 shares0.6%
Robert KrolikCFOApril 2117,500Yes68,243 shares + 40,000 options13.9%
Geoffrey DonakerCOOApril 1025,000Yes0 shares + 1,025,514 options2.4%
Joseph NachmanSVPApril 745,000Yes0 shares + 234,884 options16.1%

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.

MonthInsider selling / sharesInsider buying / shares
April 2014114,5280
March 201475,2500
February 2014153,6800
January 201447,7500
December 2013644,2240
November 2013247,3660
October 2013239,2460
September 2013290,6500
August 20139,183,4080
July 2013336,6500
June 2013409,2460
May 20132,307,9060
April 2013300,7590
March 2013778,6500
February 20131,125,8110
January 201353,1300

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

The four insiders sold their shares after these results.

Outlook

Yelp's guidance is as follows:

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

Competition

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

CompanyYELPGOOGYHOO
Market Cap:4.11B348.14B35.56B
Employees:1,98449,82912,200
Qtrly Rev Growth (yoy):0.720.10-0.01
Revenue:232.99M62.29B4.67B
Gross Margin:0.93N/A0.72
EBITDA:907.00K18.58B887.32M
Operating Margin:-0.030.230.09
Net Income:-10.07M12.34B1.29B
EPS:-0.1519.091.20
P/E:N/A27.0428.76
PEG (5 yr expected):-26.68N/A2.67
P/S:19.205.697.78

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.

CompanyInsider buying / sharesInsider selling / shares
GOOG0265,173
YHOO072,195

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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Source: Yelp: 4 Different Insiders Have Sold Shares This Month