F5 Networks: 7 Different Insiders Have Sold Shares This Month

May.14.14 | About: F5 Networks, (FFIV)

Summary

7 insiders sold F5 Networks stock within one month.

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

3 of these 7 insiders decreased their holdings by more than 10%.

F5 Networks (NASDAQ:FFIV) develops, markets, and sells application delivery networking products that optimize the security, performance, and availability of network applications, servers, and storage systems.

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Insider selling during the last 30 days

Here is a table of F5 Networks' insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
John McAdam CEO May 8 14,000 Yes 93,131 shares 13.1%
Karl Triebes CTO May 1 5,508 Yes 33,976 shares 13.9%
Scot Rogers GC May 1 620 Yes 10,683 shares 5.5%
Manuel Rivelo EVP May 1 5,134 Yes 51,065 shares 9.1%
Andrew Reinland CFO May 1 2,571 Yes 69,779 shares 3.6%
Thomas Feringa EVP May 1 4,709 Yes 37,933 shares 11.0%
Edward Eames EVP May 1 4,905 Yes 56,236 shares 8.0%
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There have been 37,447 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 F5 Networks' insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 37,447 0
April 2014 0 0
March 2014 0 0
February 2014 39,737 0
January 2014 0 0
December 2013 17,580 0
November 2013 13,220 0
October 2013 0 0
September 2013 0 0
August 2013 80,890 0
July 2013 0 0
June 2013 0 0
May 2013 18,142 0
April 2013 0 0
March 2013 0 0
February 2013 108,876 0
January 2013 0 0
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There have been 315,892 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

F5 Networks reported the fiscal 2014 second-quarter, which ended March 31, financial results on April 23 with the following highlights:

Revenue $420.0 million
GAAP net income $69.6 million
Cash $623.8 million
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The seven insiders sold their shares after these results.

Outlook

F5 Networks' fiscal 2014 third-quarter guidance is as follows:

Revenue $428-$438 million
EPS $0.99-$1.02
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Competition

F5 Networks' competitors include Cisco (NASDAQ:CSCO), Citrix Systems (NASDAQ:CTXS), and Juniper Networks (NYSE:JNPR). Here is a table comparing these companies.

Company FFIV CSCO CTXS JNPR
Market Cap: 7.88B 117.76B 9.89B 12.09B
Employees: 3,356 74,049 9,041 9,483
Qtrly Rev Growth (yoy): 0.20 -0.08 0.12 0.11
Revenue: 1.59B 47.87B 3.00B 4.78B
Gross Margin: 0.82 0.59 0.86 0.63
EBITDA: 488.92M 12.98B 679.44M 804.50M
Operating Margin: 0.28 0.22 0.14 0.13
Net Income: 282.10M 8.17B 335.77M 459.40M
EPS: 3.61 1.52 1.78 0.90
P/E: 29.03 15.03 33.88 27.63
PEG (5 yr expected): 1.21 1.52 1.69 1.08
P/S: 4.98 2.50 3.34 2.52
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F5 Networks has the highest P/S ratio among these four companies.

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

Company Insider buying / shares Insider selling / shares
CSCO 0 199,302
CTXS 0 22,726
JNPR 0 2,014,837
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Only F5 Networks has seen intensive insider selling during the last 30 days.

Conclusion

There have been seven different insiders selling F5 Networks, and there have not been any insiders buying F5 Networks during the last 30 days. Three of these seven insiders decreased their holdings by more than 10%. F5 Networks has an insider ownership of 0.31%.

F5 Networks has a $86 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $86 price target. I would place a stop loss at $117, which is the two-year high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, relatively high P/S 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 FFIV 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.