Analyzing Tuesday And Wednesday's Noteworthy Insider Buys And Sells In The Technology Sector

 |  Includes: AAPL, ADBE, DVMT, INTC, STX, TXN
by: GuruFundPicks

Insiders reported on Tuesday and Wednesday that they bought and sold stock in over 500 separate transactions in over 265 different companies. These transactions have to be reported within two days of the trade, so the transactions occurred sometime after late last week. We culled through these 500 or so insider buys and sells (based on SEC Forms 3, 4, and 5 filings), as part of our daily and weekly coverage of insider trades, and present here the most notable trades reported on Tuesday and Wednesday in the technology sector; notable based on the dollar amount sold, the number of insiders selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock (for more info on how to interpret insider trades, please refer to the end of this article):

Seagate Technology (NASDAQ:STX): STX manufactures hard disk drives for the enterprise, desktop, mobile computing, and consumer electronics markets. On Wednesday, Chairman & CEO Stephen Luczo filed SEC Form 4 indicated that he sold 157,537 shares for $3.3 million, and he also filed SEC Form 4 earlier on Tuesday, indicating that he sold 528,904 shares for $10.9 million, both sales pursuant to 10b5-1 plans. Insiders have been aggressively selling STX recently, and including the 0.74 million shares sold that we reported recently, they have sold over 1.9 million shares so far YTD (in just over a month). In comparison, insiders sold a total of 4.5 million shares in the past year. STX just this week, on Tuesday, reported a stellar Q4, obliterating analyst earnings estimates ($1.32 v/s $1.08) and giving strong guidance on revenue and gross margin for the next quarter and FY. The stock currently trades at a very cheap 3-4 forward P/E, while earnings are projected to rocket up from $1.24 in 2011 to $5.74 in 2012 and $7.73 in 2013.

Intel Corp. (NASDAQ:INTC): INTC is one of the world's largest manufacturers of semiconductor chips, including microprocessors, chipsets, network processors, motherboards, non-volatile memory and storage. Its products are used in notebooks, netbooks, desktops, servers, workstations, storage products, embedded applications, communications products, consumer electronics devices, and handhelds. On Wednesday, Vice Chairman Andy Bryant filed SEC Form 4 indicating that he exercised options and sold 400,000 shares for $10.7 million, ending with 0.29 million shares. Also, just last week, we reported that three insiders at INTC sold 0.77 million shares for $20.5 million. Insiders have been aggressively selling INTC stock recently, with 1.5 million shares sold in the last two weeks. In comparison, insiders at Intel sold a total of 3.3 million shares in the past year.

INTC shares have traded generally range-bound for the last ten years, between $15 and $30, and are currently approaching the top-end of that range, up almost 25% in the past year. Compared to its peers in the semiconductor space, INTC is undervalued, trading at 10-11 forward P/E and 2.7 P/B compared to averages of 14.6 and 3.7 respectively, while earnings are projected to rise modestly from $2.53 in 2011 to $2.60 in 2013. Also, it has an attractive annual dividend yield of 3.1%.

Texas Instruments (NYSE:TXN): TXN is a global manufacturer of analog ICs and digital signal processors used in cell phones, navigation systems and PCs. On Wednesday, eleven insiders, all SVP's, with most of them selling between 15,000 and 30,000 shares, filed SEC Forms 4 indicating that together they sold 0.28 million shares for $8.9 million. In comparison, insiders sold a total of 2.7 million shares in the past year. TXN reported a good Q4 just early last week, on Monday, beating both revenue and earnings estimates handily; the stock has been strong after the report, and it currently trades at 13-14 forward P/E and 3.4 P/B compared to averages of 13.7 and 3.7 for its peers in the general semiconductors group.

Apple Inc. (NASDAQ:AAPL): Probably among the most innovative companies the world has ever known, this maker of the iPhone, iPod, and iPad, founded by the late Steve Jobs, is one of the world's largest manufacturers of personal computers, mobile communication devices, and portable digital music players. On Tuesday, SVP Robert Mansfield filed SEC Form 4 indicating that exercised options and sold the resulting 30,000 shares for $13.6 million, ending with 501 shares after the sale. In comparison, insiders at AAPL sold 45,000 shares during the past three months and 0.26 million in the past year. AAPL is one of the strongest long-term performers in the market, up a massive almost forty-fold in the past decade and currently trade at all-time highs.

This gem of a company can still be bought for 9-10 P/E compared to 9.2 average for its peers in the micro-computer group, but adjusted for growth the company trades at a discount; earnings at AAPL are projected to increase at a compound 30.2% annualized rate from $27.68 in 2011 to $46.89 in 2013, compared to the average 5%-10% growth rates for many of its peers in the group.

On top of these, some additional large insider trades on Tuesday and Wednesday in the technology sector included a $1.0 million sale by CFO David Goulden at enterprise storage systems and software vendor EMC Corp. (EMC); and a $4.7 million sale by five insiders at diversified software company Adobe Systems Inc. (NASDAQ:ADBE) that offers a line of creative, business, Web and mobile software and services;

Disclosure: I am long STX.

Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and The information and data is believed to be accurate, but no guarantees or representations are made.

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