Demandware (NYSE:DWRE) provides cloud-based digital commerce solutions in the United States, Germany, the United Kingdom, and internationally.
Click to enlarge
Insider selling during the last 30 days
Here is a table of Demandware'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|
|Charles Kane||Director||June 19||15,000||Yes||Yes||14,391
shares + 12,280 options
|Lawrence Bohn||Director||May 29-June 12||900,484||No||No||913,232 shares||49.6%|
|Scott Dussault||EVP||June 2||17,249||Yes & No||Yes||41,141
shares + 87,332 options
|Jitendra Saxena||Director||June 2||8,000||No||Yes||61,289
shares + 65,472 options
There have been 940,733 shares sold by insiders during the last 30 days. Charles Kane, Scott Dussault, and Jitendra Saxena 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 Demandware's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 3,453,412 shares sold and there have been zero shares purchased by insiders since January 2013. The month of June has seen the most insider selling this year.
Demandware reported the first-quarter financial results on May 6 with the following highlights:
|GAAP net loss||$8.8 million|
The four insiders sold their shares after these results.
Demandware's guidance is as follows:
|Revenue||$33.5-$34 million||$147.5-$148.5 million|
|GAAP net loss||$11.7-$12.2 million||$29-$30 million|
|Qtrly Rev Growth (yoy):||0.57||0.14||-0.12||0.04|
|PEG (5 yr expected):||-36.75||1.29||3.59||1.33|
Demandware 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|
Only Demandware has seen intensive insider selling during the last 30 days.
There have been four different insiders selling Demandware, and there have not been any insiders buying Demandware during the last 30 days. Three of these four insiders decreased their holdings by more than 10%. Demandware has an insider ownership of 31.17%.
Before going short Demandware, I would like to get a bearish confirmation from the Point & Figure chart. The three main reasons for the proposed short entry are a relatively high P/S ratio, negative earnings, 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.