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Summary

  • 7 insiders sold Analog Devices stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • 3 of these 7 insiders decreased their holdings by more than 10%.

Analog Devices (NASDAQ:ADI) is engaged in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits for use in industrial, automotive, consumer, and communication markets worldwide.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Analog Devices' insider activity during the last 30 days.

NameTitleTrade DateShares SoldOption Exercise & SaleRule 10b5-1Current OwnershipDecrease In Ownership
Grant SaviersDirectorJune 18-2418,000YesNo14,655
shares + 81,890 options
15.7%
Richard MeaneyVPJune 19-2050,000YesNo16,941
shares + 67,367 options
37.2%
Kenton SicchitanoDirectorJune 2018,000YesNo12,655
shares + 96,890 options
14.1%
Ray StataDirectorJune 1750,000NoNo2,015,187
shares + 13,800 options
2.4%
Margaret SeifVPJune 164,000YesYes10,368
shares + 61,788 options
5.3%
David ZinsnerCFOJune 25,140YesYes29,504
shares + 114,930 options
3.4%
Vincent RocheCEOJune 28,000YesYes16,723
shares + 197,822 options
3.6%

There have been 153,140 shares sold by insiders during the last 30 days. Margaret Seif, David Zinsner, and Vincent Roche 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 Analog Devices' insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
June 2014153,1400
May 201417,1400
April 201417,1400
March 2014252,8490
February 2014179,0820
January 201422,0000
December 2013414,2650
November 20135,0000
October 2013135,0000
September 2013125,1100
August 201317,3600
July 201323,5170
June 2013156,5000
May 201351,7780
April 20138,7150
March 2013105,4420
February 201360,7820
January 201399,8830

There have been 1,844,703 shares sold and there have been zero shares purchased by insiders since January 2013.

Financials

Analog Devices reported the fiscal 2014 second-quarter, which ended May 3, financial results on May 20 with the following highlights:

Revenue$694.5 million
Net income$187.4 million
Cash$4.8 billion
Debt$872.5 million

The seven insiders sold their shares after these results.

Outlook

Analog Devices' fiscal 2014 third-quarter guidance is as follows:

Revenue growth1%-5% sequentially
EPS$0.60-$0.64

Competition

Analog Devices' competitors include NXP Semiconductors (NASDAQ:NXPI), STMicroelectronics (NYSE:STM), and Texas Instruments (NASDAQ:TXN). Here is a table comparing these companies.

CompanyADINXPISTMTXN
Market Cap:16.86B16.21B8.18B51.72B
Employees:9,10026,21445,39032,209
Qtrly Rev Growth (yoy):0.050.15-0.090.03
Revenue:2.68B4.98B7.90B12.30B
Gross Margin:0.650.460.330.54
EBITDA:937.27M1.22B817.00M4.44B
Operating Margin:0.310.15-0.010.26
Net Income:717.81M472.00M-353.00M2.25B
EPS:2.261.84-0.402.03
P/E:23.7635.01N/A23.57
PEG (5 yr expected):1.980.438.491.96
P/S:6.333.261.034.19

Analog Devices has the highest P/S ratio among these four companies.

Conclusion

There have been seven different insiders selling Analog Devices and there have not been any insiders buying Analog Devices during the last 30 days. Three of these seven insiders decreased their holdings by more than 10%. Analog Devices has an insider ownership of 0.99%.

Before going short Analog Devices, I would like to get a bearish confirmation from the Point & Figure chart. The two main reasons for the proposed short entry are a relatively high P/S ratio, and the intensive insider-selling activity.

Source: Analog Devices: 7 Different Insiders Have Sold Shares This Month