Electronic Arts: 3 Different Insiders Have Sold Shares This Month

May.11.14 | About: Electronic Arts (EA)

Summary

3 insiders sold Electronic Arts stock within one month.

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

All 3 of these insiders decreased their holdings by more than 10%.

Electronic Arts (NASDAQ:EA) develops, markets, publishes, and distributes game software content and services for video game consoles, personal computers, mobile phones, tablets and electronic readers, and the Internet.

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Insider selling during the last 30 days

Here is a table of Electronic Arts' insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Patrick Soderlund EVP May 8 36,133 No 0 shares 100%
Peter Moore COO May 8 100,000 No 108,691 shares 47.9%
Stephen Bene SVP May 8 7,771 No 0 shares 100%
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There have been 143,904 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Electronic Arts' insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 143,904 0
April 2014 0 0
March 2014 0 0
February 2014 1,563,159 0
January 2014 55,000 0
December 2013 0 0
November 2013 55,000 0
October 2013 269,874 0
September 2013 0 0
August 2013 69,409 0
July 2013 125,000 0
June 2013 0 0
May 2013 636,533 0
April 2013 0 0
March 2013 0 0
February 2013 107,939 31,300
January 2013 0 0
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There have been 3,025,818 shares sold, and there have been 31,300 shares purchased by insiders since January 2013.

Financials

Electronic Arts reported the fiscal 2014 full-year, which ended March 31, financial results on May 6 with the following highlights:

Revenue $3.6 billion
Net income $8 million
Cash $2.4 billion
Debt $0.6 billion
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The three insiders sold their shares after these results.

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(Source: Earnings presentation)

Outlook

Electronic Arts' guidance is as follows:

Q1/2015 FY2015
Revenue ~$1.20 billion ~$4.38 billion
EPS $1.26 $2.37
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(Source: Earnings presentation)

Competition

Electronic Arts' competitors include Activision Blizzard (NASDAQ:ATVI) and Nintendo (OTCPK:NTDOY). Here is a table comparing these companies.

Company EA ATVI NTDOY
Market Cap: 10.86B 14.73B 13.43B
Employees: 9,300 6,790 5,080
Qtrly Rev Growth (yoy): -0.07 -0.16 -0.12
Revenue: 3.58B 4.37B 5.78B
Gross Margin: 0.62 0.67 0.27
EBITDA: 385.00M 1.32B -189.82M
Operating Margin: 0.01 0.28 -0.05
Net Income: 8.00M 824.00M 26.89M
EPS: 0.03 0.88 0.03
P/E: 1,171.33 23.59 499.81
PEG (5 yr expected): 0.80 1.01 N/A
P/S: 2.90 3.37 2.29
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Electronic Arts has the highest P/E ratio among these three companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
ATVI 0 2,328,432
NTDOY N/A N/A
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Only Electronic Arts has seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Electronic Arts, and there have not been any insiders buying Electronic Arts during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Electronic Arts has an insider ownership of 4.48%.

Before going short Electronic Arts, I would like to get a bearish confirmation from the Point & Figure chart. The main reason for the proposed short entry is the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within 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.