Cognizant Technology Solutions (NASDAQ:CTSH) provides information technology, consulting, and business process outsourcing services worldwide.
Insider selling during the last 30 days
Here is a table of Cognizant'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|
|Gordon Coburn||President||June 4-24||31,014||Yes & No||Yes||126,716
shares + 73,642 options
|Karen McLoughlin||CFO||June 6-17||8,793||No||Yes||22,173
shares + 80,000 options
|Venkat Krishnaswamy||EVP||June 9||3,000||No||No||22,066
|Steven Schwartz||EVP||June 6||6,647||No||Yes||0 shares||100%|
|Malcolm Frank||EVP||June 6||8,676||No||Yes||1,553
There have been 58,130 shares sold by insiders during the last 30 days. Gordon Coburn, Karen McLoughlin, Steven Schwartz, and Malcolm Frank 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 Cognizant's insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
(Note: Cognizant had a two-for-one stock split on March 7, 2014)
There have been 951,166 shares sold and there have been 7,500 shares purchased by insiders since January 2013.
Cognizant reported the first-quarter financial results on May 7 with the following highlights:
|Net income||$348.9 million|
The five insiders sold their shares after these results.
Cognizant's guidance is as follows:
|Revenue||$2.50-$2.53 billion||at least $10.3 billion|
|Non-GAAP EPS||$0.62||at least $2.54|
|Qtrly Rev Growth (yoy):||0.20||0.08||0.23|
|PEG (5 yr expected):||1.22||1.08||1.47|
Cognizant has the highest P/E ratio among these three companies.
There have been five different insiders selling Cognizant and there have not been any insiders buying Cognizant during the last 30 days. Four of these five insiders decreased their holdings by more than 10%. Cognizant has an insider ownership of 0.51%.
Cognizant has a $38 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $38 price target. I would place a stop loss at $54, which is the all-time high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, relatively high P/E ratio, and the intensive insider-selling activity.
Disclosure: The author has no positions in any stocks mentioned, but may initiate a short position in CTSH 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.