NetApp: 5 Different Insiders Have Sold Shares This Month

Jun.28.14 | About: NetApp, Inc. (NTAP)

Summary

5 insiders sold NetApp stock within one month.

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

2 of these 5 insiders decreased their holdings by more than 10%.

NetApp (NASDAQ:NTAP) is a provider of storage systems and data management solutions for IT infrastructures.

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Insider selling during the last 30 days

Here is a table of NetApp'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
Robert Wall Director June 26 80,000 Yes & No No 90,571
shares + 110,000 options
28.5%
George Shaheen Director June 25 20,000 Yes No 4,466
shares + 110,000 options
14.9%
Thomas Georgens CEO June 5 23,300 No No 10,329
shares + 778,646 options
2.9%
Nicholas Noviello CFO June 3-4 11,519 No Yes 21,437
shares + 168,031
options
5.7%
Daniel Warmenhoven Director June 2 18,423 Yes Yes 2,170,935
shares + 1,203,703
options
0.5%
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There have been 153,242 shares sold by insiders during the last 30 days. Nicholas Noviello, and Daniel Warmenhoven 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 NetApp's insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
June 2014 153,242 0
May 2014 41,763 0
April 2014 41,758 0
March 2014 45,540 0
February 2014 113,640 0
January 2014 81,758 0
December 2013 218,541 0
November 2013 91,758 0
October 2013 30,000 0
September 2013 134,766 0
August 2013 306,758 0
July 2013 111,675 0
June 2013 199,412 0
May 2013 583,931 0
April 2013 97,152 0
March 2013 133,579 0
February 2013 229,143 0
January 2013 82,344 0
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There have been 2,696,760 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.

Financials

NetApp reported the fiscal 2014 full-year, which ended April 25, financial results on May 21 with the following highlights:

Revenue $6.3 billion
Net income $637.5 million
Cash $5.0 billion
Debt $1.0 billion
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The five insiders sold their shares after these results.

NetApp has negative revenue growth currently.

Outlook

NetApp's fiscal 2015 first-quarter guidance is as follows:

Revenue $1.420-$1.520 billion
GAAP EPS $0.32-$0.37
Non-GAAP EPS $0.53-$0.58
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Competition

NetApp's competitors include EMC Corporation (NYSE:EMC), and Hewlett-Packard (NYSE:HPQ). Here is a table comparing these companies.

Company NTAP EMC HPQ
Market Cap: 11.48B 54.11B 63.46B
Employees: 12,490 63,900 317,500
Qtrly Rev Growth (yoy): -0.04 0.02 -0.01
Revenue: 6.33B 23.31B 111.82B
Gross Margin: 0.62 0.62 0.24
EBITDA: 1.03B 5.54B 13.11B
Operating Margin: 0.13 0.18 0.08
Net Income: 637.50M 2.70B 5.50B
EPS: 1.83 1.26 2.84
P/E: 19.39 20.93 11.94
PEG (5 yr expected): 0.99 1.27 2.00
P/S: 1.83 2.30 0.57
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NetApp has the second-highest P/S ratio among these three companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
EMC 0 331,475
HPQ 0 177,981
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Only NetApp has seen intensive insider selling during the last 30 days.

Conclusion

There have been five different insiders selling NetApp and there have not been any insiders buying NetApp during the last 30 days. Two of these five insiders decreased their holdings by more than 10%. NetApp has an insider ownership of 0.69%.

NetApp has a $23 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $23 price target. I would place a stop loss at $46, which is the 52-week high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, negative revenue growth, and the intensive insider-selling activity.

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Disclosure: The author has no positions in any stocks mentioned, but may initiate a short position in NTAP 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.