Seagate: 3 Different Insiders Have Sold Shares This Month

May.18.14 | About: Seagate Technology (STX)

Summary

3 insiders sold Seagate stock within one month.

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

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

Seagate Technology (NASDAQ:STX) designs, manufactures, and sells electronic data storage products.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Douglas Dehaan GM May 6 15,490 No 18,802 shares + 37,777 options 21.5%
Lydia Marshall Director May 6 10,626 No 26,678 shares 28.5%
David Morton SVP May 2 2,803 No 22,250 shares + 19,569 options 6.3%
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There have been 28,919 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Seagate's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
May 2014 28,919 0
April 2014 100,000 0
March 2014 1,034 0
February 2014 121,465 0
January 2014 2,270 0
December 2013 0 0
November 2013 954,772 1,742
October 2013 33,058,500 0
September 2013 45,361 0
August 2013 26,121 0
July 2013 372,323 0
June 2013 11,500 0
May 2013 252,383 0
April 2013 11,500 0
March 2013 11,860 0
February 2013 200,231 0
January 2013 259,499 0
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There have been 35,457,738 shares sold, and there have been 1,742 shares purchased by insiders since January 2013.

Financials

Seagate reported the fiscal 2014 third-quarter, which ended March 28, financial results on April 29 with the following highlights:

Revenue $3.4 billion
Net income $395 million
Cash $2.3 billion
Debt $3.5 billion
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The three insiders sold their shares after these results.

Seagate has negative revenue growth currently.

Outlook

Seagate's fiscal 2014 fourth-quarter guidance is as follows:

Revenue $3.3 billion
Operating expenses $505 million
Non-GAAP gross margin ~28%
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Competition

Seagate's competitors include Western Digital Corporation (NASDAQ:WDC), and Toshiba Corporation (OTCPK:TOSBF). Here is a table comparing these companies.

Company STX WDC TOSBF
Market Cap: 16.43B 19.98B 16.73B
Employees: 53,200 85,777 206,000
Qtrly Rev Growth (yoy): -0.03 -0.02 0.14
Revenue: 13.85B 15.21B 63.17B
Gross Margin: 0.28 0.29 N/A
EBITDA: 2.73B 3.18B 5.13B
Operating Margin: 0.13 0.13 0.05
Net Income: 1.60B 1.04B 607.00M
EPS: 4.49 4.28 0.14
P/E: 11.20 19.86 27.62
PEG (5 yr expected): 1.32 6.62 N/A
P/S: 1.20 1.32 0.26
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Seagate has the weakest revenue growth among these three companies.

Conclusion

There have been three different insiders selling Seagate, and there have not been any insiders buying Seagate during the last 30 days. Two of these three insiders decreased their holdings by more than 10%. Seagate has an insider ownership of 13.70%.

Before going short Seagate, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are negative revenue growth, 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.

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