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Summary

  • 3 insiders purchased Rally stock within one month.
  • The stock was sold by no insiders in the month of intensive purchasing.
  • 2 of these 3 insiders increased their holdings by more than 10%.

Rally Software Development Corp. (NYSE:RALY) provides cloud-based solutions for managing Agile software development activities worldwide.

(click to enlarge)

Insider buying during the last 30 days

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

NameTitleTrade DateShares PurchasedCurrent OwnershipIncrease In Shares
Timothy MillerCEOJune 1230,000565,893 shares+5.6%
Thomas BoganDirectorJune 1250,000119,060
shares
+72.4%
Timothy WolfDirectorJune 125,00035,527
shares
+16.4%

There have been 85,000 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

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

MonthInsider buying / sharesInsider selling / shares
June 201485,0000
May 201400
April 201400
March 201400
February 201400
January 201400
December 2013012,000
November 201300
October 201300
September 201300
August 201300
July 201304,485,156
June 201302,199
May 201300
April 201355,5000

There have been 140,500 shares purchased and there have been 4,499,355 shares sold by insiders since April 2013. The month of June 2014 has seen the most insider buying. Rally had its IPO in April 2013.

Financials

Rally reported the fiscal 2015 first-quarter, which ended April 30, financial results on June 5 with the following highlights:

Revenue$19.4 million
GAAP net loss$8.5 million
Cash$85.7 million
Net cash$3.45 per share

The stock plunged after these results and the three insiders purchased their shares after the plunge.

(click to enlarge)

(Source: Investor presentation)

Outlook

Rally's guidance is as follows:

Q2/15FY2015
Revenue$20.2-$20.8 million$87.0-$90.0 million
Non-GAAP EPS-$0.39 to -$0.42-$1.31 to -$1.36

(click to enlarge)

(Source: Investor presentation)

Competition

Rally's competitors include Hewlett-Packard (NYSE:HPQ), International Business Machines (NYSE:IBM), and Microsoft (NASDAQ:MSFT). Here is a table comparing these companies.

CompanyRALYHPQIBMMSFT
Market Cap:270.10M65.17B184.65B343.39B
Employees:494317,500431,21299,000
Qtrly Rev Growth (yoy):0.21-0.01-0.04-0.00
Revenue:77.71M111.82B98.83B83.35B
Gross Margin:0.760.240.490.70
EBITDA:-18.66M13.11B25.15B32.13B
Operating Margin:-0.280.080.210.34
Net Income:-22.82M5.50B15.84B22.43B
EPS:-0.932.8414.632.67
P/E:N/A12.2612.4715.58
PEG (5 yr expected):-0.292.071.172.25
P/S:3.100.591.874.09

Rally has the fastest revenue growth among these four companies.

Here is a table of these competitors' insider activities during the last three months.

CompanyInsider buying / sharesInsider selling / shares
HPQ096,984
IBM033,432
MSFT2,950,50120,056,000

Only Rally has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Rally and there have not been any insiders selling Rally during the last 30 days. Two of these three insiders increased their holdings by more than 10%. Rally has an insider ownership of 3.00%.

The three insiders purchased their shares at prices ranging from $9.15 to $9.21. I believe Rally could be a good pick below $9.21 based on the intensive insider buying.

Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in RALY over 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.

Source: Rally Software: 3 Different Insiders Have Purchased Shares This Month