Western Digital: 6 Different Insiders Have Sold Shares This Month

Jun.23.14 | About: Western Digital (WDC)


6 insiders sold Western Digital stock within one month.

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

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

Western Digital Corporation (NYSE:WDC) develops, manufactures, and sells storage products and solutions that enable people to create, manage, experience, and preserve digital content.

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Insider selling during the last 30 days

Here is a table of Western Digital'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
Stephen Milligan CEO June 19 13,877 Yes Yes 99,525
shares + 109,459 options
Thomas Pardun Director June 17 6,909 Yes No 27,867
shares + 28,894 options
William Kimsey Director June 17 8,277 Yes No 20,392
shares + 5,391 options
Michael Ray SVP June 17-18 9,060 Yes Yes 29,316 shares + 37,738 options 11.9%
James Murphy President, WD Subsidiary May 27-June 10 14,668 Yes & No No 57,578
shares + 56,649 options
Michael Cordano President, HGST Subsidiary June 6 5,896 Yes Yes 79,132
shares + 53,063 options
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There have been 58,687 shares sold by insiders during the last 30 days. Stephen Milligan, Michael Ray, and Michael Cordano 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 Western Digital's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2014 51,032 0
May 2014 20,501 0
April 2014 6,016 0
March 2014 49,393 0
February 2014 61,607 0
January 2014 6,016 0
December 2013 54,155 0
November 2013 12,648,317 0
October 2013 24,213 0
September 2013 75,994 0
August 2013 13,237 0
July 2013 7,713 0
June 2013 42,809 0
May 2013 196,622 0
April 2013 3,750 0
March 2013 61,891 0
February 2013 69,863 0
January 2013 42,055 0
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There have been 13,435,184 shares sold and there have been zero shares purchased by insiders since January 2013.


Western Digital reported the fiscal 2014 third-quarter, which ended March 28, financial results on April 30 with the following highlights:

Revenue $3.7 billion
Net income $375 million
Cash $4.9 billion
Debt $2.5 billion
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The six insiders sold their shares after these results.

Western Digital has negative revenue growth currently.


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

Revenue $3.5-$3.6 billion
Non-GAAP EPS $1.65-$1.75
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Western Digital's competitors include Seagate Technology (NASDAQ:STX). Here is a table comparing these two companies.

Company WDC STX
Market Cap: 21.50B 18.38B
Employees: 85,777 53,200
Qtrly Rev Growth (yoy): -0.02 -0.03
Revenue: 15.21B 13.85B
Gross Margin: 0.29 0.28
EBITDA: 3.18B 2.73B
Operating Margin: 0.13 0.13
Net Income: 1.04B 1.60B
EPS: 4.28 4.49
P/E: 21.37 12.54
PEG (5 yr expected): 7.09 1.28
P/S: 1.41 1.33
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Western Digital is trading at a higher P/E ratio than Seagate. In Seagate, there have been 316,458 shares sold and there have been zero shares purchased by insiders this year. Only Western Digital has seen intensive insider selling during the last 30 days.


There have been six different insiders selling Western Digital and there have not been any insiders buying Western Digital during the last 30 days. Four of these six insiders decreased their holdings by more than 10%. Western Digital has an insider ownership of 10.98%.

Before going short Western Digital, 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/E ratio, 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.