Cisco: 9 Different Insiders Have Sold Shares During The Last 30 Days

Jun.12.14 | About: Cisco Systems, (CSCO)

Summary

9 insiders sold Cisco stock within one month.

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

6 of these 9 insiders decreased their holdings by more than 10%.

Cisco Systems (NASDAQ:CSCO) designs, manufactures, and sells Internet Protocol and other products related to the communications and information technology industry worldwide.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Option Exercise & Sale Rule 10b5-1 Current Ownership Decrease In Ownership
Pankaj Patel EVP May 19-June 10 60,000 No Yes 1,002,364 shares + 855,000 options 3.1%
Blair Christie SVP May 19-June 10 309,083 Yes & No Yes 280,739 shares + 100,000 options 44.8%
John Chambers CEO May 19-June 10 2,300,000 Yes & No Yes 2,098,733
shares + 3,075,000 options
30.8%
Michele Burns Director May 23-30 30,000 Yes & No No 59,864
shares + 30,000 options
25.0%
Steven West Director May 20 25,000 No No 46,099 shares + 30,000 options 24.7%
Charles Robbins SVP May 19 70,000 Yes Yes 580,297
shares + 218,667
options
8.1%
Gary Moore COO May 19 137,500 Yes Yes 642,154
shares + 590,000 options
10.0%
Roderick McGeary Director May 20 20,000 Yes No 109,622
shares + 30,000 options
12.5%
Frank Calderoni CFO May 19 178,750 Yes Yes 638,531
shares + 1,040,000 options
9.6%
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There have been 3,130,333 shares sold by insiders during the last 30 days. Pankaj Patel, Blair Christie, John Chambers, Charles Robbins, Gary Moore, and Frank Calderoni sold their 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 Cisco's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2014 353,311 0
May 2014 2,875,193 0
April 2014 0 0
March 2014 50,226 0
February 2014 149,076 0
January 2014 0 0
December 2013 10,000 0
November 2013 162,226 0
October 2013 0 0
September 2013 1,108,941 0
August 2013 205,000 0
July 2013 0 0
June 2013 97,030 0
May 2013 2,194,814 0
April 2013 0 0
March 2013 591,929

0

February 2013 209,803 0
January 2013 25,000 0
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There have been 8,032,549 shares sold and there have been zero shares purchased by insiders since January 2013. The month of May 2014 has seen the most insider selling.

Financials

Cisco reported the fiscal 2014 third-quarter, which ended April 27, financial results on May 14 with the following highlights:

Revenue $11.5 billion
Net income $2.2 billion
Cash $50.5 billion
Debt $20.9 billion
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The nine insiders sold their shares after these results.

Cisco has negative revenue growth currently.

Outlook

Cisco's fourth-quarter guidance is as follows:

Revenue growth (year-over-year) -3% to -1%
Non-GAAP EPS $0.51-$0.53
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Competition

Cisco's competitors include Alcatel-Lucent (ALU), Hewlett-Packard (NYSE:HPQ), and Juniper Networks (NYSE:JNPR). Here is a table comparing these companies.

Company CSCO ALU HPQ JNPR
Market Cap: 128.27B 10.70B 62.84B 11.68B
Employees: 73,849 62,311 317,500 9,483
Qtrly Rev Growth (yoy): -0.06 -0.03 -0.01 0.11
Revenue: 47.20B 19.58B 111.82B 4.78B
Gross Margin: 0.59 0.33 0.24 0.63
EBITDA: 12.87B 1.06B 13.18B 812.70M
Operating Margin: 0.22 0.02 0.08 0.13
Net Income: 7.88B -1.41B 5.50B 459.40M
EPS: 1.48 -0.56 2.84 0.90
P/E: 16.90 N/A 11.70 27.40
PEG (5 yr expected): 1.59 0.64 1.96 1.08
P/S: 2.72 0.55 0.56 2.44
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Cisco has the highest P/S ratio among these four companies. Hewlett-Packard and Juniper have also seen insider selling during the last 30 days.

Conclusion

There have been nine different insiders selling Cisco and there have not been any insiders buying Cisco during the last 30 days. Six of these nine insiders decreased their holdings by more than 10%. Cisco has an insider ownership of 0.09%.

Before going short Cisco, 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: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.