Fairchild Semiconductor: 3 Different Insiders Have Sold Shares During The Last 30 Days

May.13.14 | About: Fairchild Semiconductor (FCS)

Summary

3 insiders sold Fairchild Semiconductor 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%.

Fairchild Semiconductor International (NYSE:FCS) designs, develops, manufactures, and sells power analog, power discrete, and non-power semiconductor solutions worldwide.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Paul Delva SVP May 9 36,000 No 46,384 shares 43.7%
Anthony Lear Director May 8 4,900 Yes 10,000 shares 32.9%
Kevin London SVP April 24 20,000 No 19,428 shares 50.7%
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There have been 60,900 shares sold by insiders during the last 30 days. Anthony Lear sold shares 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 Fairchild Semiconductor's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 40,900 0
April 2014 20,000 0
March 2014 109,789 0
February 2014 0 0
January 2014 0 0
December 2013 15,000 0
November 2013 17,000 0
October 2013 0 0
September 2013 49,932 0
August 2013 0 20,000
July 2013 0 0
June 2013 0 0
May 2013 3,136 0
April 2013 0 0
March 2013 0 0
February 2013 10,000 0
January 2013 125,274 0
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There have been 391,031 shares sold, and there have been 20,000 shares purchased by insiders since January 2013.

Financials

Fairchild Semiconductor reported the first-quarter financial results on April 17 with the following highlights:

Revenue $344.1 million
Net loss $9.3 million
Cash $316.0 million
Debt $200.1 million
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The three insiders sold their shares after these results.

Outlook

Fairchild Semiconductor's second-quarter guidance is as follows:

Revenue $355-$375 million
Adjusted gross margin 31%-32%
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Competition

Fairchild Semiconductor's competitors include Analog Devices (NYSE:ADI), NXP Semiconductors NV (NASDAQ:NXPI), and Texas Instruments (NYSE:TXN). Here is a table comparing these companies.

Company FCS ADI NXPI TXN
Market Cap: 1.67B 16.33B 15.82B 50.73B
Employees: 8,659 9,100 26,214 32,209
Qtrly Rev Growth (yoy): 0.00 0.01 0.15 0.03
Revenue: 1.41B 2.64B 4.98B 12.30B
Gross Margin: 0.31 0.65 0.46 0.54
EBITDA: 177.50M 908.12M 1.22B 4.44B
Operating Margin: 0.03 0.30 0.15 0.26
Net Income: -3.80M 694.85M 472.00M 2.25B
EPS: -0.03 2.20 1.84 2.03
P/E: N/A 23.77 34.08 23.11
PEG (5 yr expected): 5.15 1.92 0.40 1.88
P/S: 1.15 6.07 3.02 4.02
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Fairchild Semiconductor has the highest PEG ratio among these four companies.

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

Company Insider buying / shares Insider selling / shares
ADI 0 17,140
NXPI N/A N/A
TXN 0 829,125
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Texas Instruments has also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Fairchild Semiconductor, and there have not been any insiders buying Fairchild Semiconductor during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Fairchild Semiconductor has an insider ownership of 0.68%.

Fairchild Semiconductor has a $9 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $9 price target. I would place a stop loss at $16, which is the two-year high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, relatively high PEG ratio, 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 FCS 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.