Cavium (NASDAQ:CAVM) designs, develops, and markets semiconductor processors for intelligent and secure networks.
Insider selling during the last 30 days
Here is a table of Cavium's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Syed Ali||CEO||May 9||150,000||Yes||1,170,412
|Vincent Pangrazio||SVP||May 5||3,325||Yes||11,036 shares||23.2%|
|Anil Jain||VP||May 2||36,475||Yes||27,875 shares + 66,400 options||27.9%|
There have been 189,800 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 Cavium's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 487,000 shares sold, and there have been zero shares purchased by insiders since January 2013.
Cavium reported the first-quarter financial results on April 30 with the following highlights:
|Net income||$2.3 million|
The three insiders sold their shares after these results.
Cavium's second-quarter guidance is as follows:
|Qtrly Rev Growth (yoy):||0.20||0.01||0.02|
|PEG (5 yr expected):||0.93||1.38||1.86|
Cavium has the highest P/S ratio among these three companies.
Here is a table of these competitors' insider activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only Cavium has seen intensive insider selling during the last 30 days.
There have been three different insiders selling Cavium, and there have not been any insiders buying Cavium during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Cavium has an insider ownership of 3.10%.
Before going short Cavium, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are a relatively high P/S ratio, and 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.