Adobe: 7 Different Insiders Have Sold Shares This Month

Jun.27.14 | About: Adobe Systems (ADBE)

Summary

7 insiders sold Adobe stock within one month.

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

6 of these 7 insiders decreased their holdings by more than 10%.

Adobe Systems Incorporated (NASDAQ:ADBE) operates as a diversified software company worldwide.

Click to enlarge

Insider selling during the last 30 days

Here is a table of Adobe'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
Richard Rowley VP June 24 13,835 Yes & No No 0 shares 100%
Donna Morris SVP June 23 35,618 Yes & No No 85,827
shares
29.3%
Bryan Lamkin SVP June 23 5,392 No No 5,392
shares
50.0%
David Wadhwani SVP June 24 5,599 Yes No 25,000 shares 18.3%
James Daley Director June 19 5,000 Yes No 20,674
shares + 74,704 options
5.0%
Matthew Thompson EVP June 19 23,917 Yes No 50,875 shares 32.0%
Shantanu Narayen CEO June 19 439,000 Yes Yes 258,737
shares + 622,633 options
33.2%
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There have been 528,361 shares sold by insiders during the last 30 days. Shantanu Narayen sold his 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 Adobe's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2014 528,361 0
May 2014 52,395 0
April 2014 205,273 0
March 2014 137,288 0
February 2014 65,000 0
January 2014 514,425 0
December 2013 163,010 0
November 2013 57,740 0
October 2013 6,175,000 0
September 2013 96,056 0
August 2013 65,000 0
July 2013 813,939 0
June 2013 450,276 0
May 2013 0 0
April 2013 324,073 0
March 2013 465,962 0
February 2013 0 0
January 2013 284,177 5,000
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There have been 10,397,975 shares sold and there have been 5,000 shares purchased by insiders since January 2013.

Financials

Adobe reported the fiscal 2014 second-quarter, which ended May 30, financial results on June 17 with the following highlights:

Revenue $1.1 billion
Net income $88.5 million
Cash $3.3 billion
Debt $1.5 billion
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The stock spiked up $6 after these results and the seven insiders sold their shares after the spike.

Adobe's revenues peaked in 2012.

Outlook

Adobe's fiscal 2014 third-quarter guidance is as follows:

Revenue $975-$1,025 million
Non-GAAP EPS $0.22-$0.28
GAAP EPS $0.02-$0.08
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(Source: Earnings presentation)

Competition

Adobe's competitors include Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Autodesk (NASDAQ:ADSK). Here is a table comparing these companies.

Company ADBE AAPL MSFT ADSK
Market Cap: 36.14B 543.93B 342.76B 12.71B
Employees: 11,847 80,300 99,000 7,600
Qtrly Rev Growth (yoy): 0.06 0.05 -0.00 0.04
Revenue: 4.11B 176.04B 83.35B 2.30B
Gross Margin: 0.85 0.38 0.70 0.88
EBITDA: 747.81M 57.80B 32.13B 392.20M
Operating Margin: 0.10 0.29 0.34 0.11
Net Income: 283.89M 37.71B 22.43B 201.50M
EPS: 0.52 5.96 2.67 0.88
P/E: 139.58 15.13 15.55 63.47
PEG (5 yr expected): 4.81 1.10 2.28 5.76
P/S: 8.79 3.10 4.17 5.52
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Adobe 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
AAPL 0 23,872
MSFT 2,950,501 40,139,400
ADSK 0 1,128,446
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Autodesk has also seen intensive insider selling during the last 30 days.

Conclusion

There have been seven different insiders selling Adobe and there have not been any insiders buying Adobe during the last 30 days. Six of these seven insiders decreased their holdings by more than 10%. Adobe has an insider ownership of 0.38%.

Before going short Adobe, 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, high P/E ratio, 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.