We present here noteworthy buys and sells in the tech sector from Friday's SEC Form 4 (insider trading) filings, as part of our daily and weekly coverage of insider trades. These were selected by a review of 480 separate transactions in over 275 different companies that were filed with the SEC on Friday. The filings are noteworthy based on the dollar amount sold, the number of insiders buying or 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):
LSI Corp. (LSI): LSI is a designer of complex high-performance ICs and storage systems. Its silicon-to-systems solutions are at the heart of products that create, store, consume and transport digital information. Its ICs are used in hard disk and solid state drives, high-speed communications and storage systems, computer servers and PCs.
On Friday, CEO Abhijit Talwalkar filed SEC Form 4 indicating that he exercised options and sold the resulting 1 million shares for $8.5 million, pursuant to a 10b5-1 plan, and ended with 0.51 million shares after the sale (not including derivative holdings). This is on top of the 1 million share sale that we reported by Mr. Talwalkar almost two weeks ago, so that overall insiders have reported selling a total of 3.6 million shares in the past three-to-four weeks. In comparison, insiders sold only an additional 0.13 million shares in the past year. Also, last week we reported that Short Hills, NJ-based mutual fund powerhouse Franklin Mutual Advisers bolted completely out of its 12.5 million share position.
This insider and leading institutional selling is occurring as LSI is finally breaking out of four-and-a-half year consolidation pattern to new highs, implying that both have less confidence that the almost 60% rally we have seen in LSI in the last two months (since mid-December) is sustainable. LSI shares gapped up recently after the company reported a strong Q4 report, on January 25th, beating earnings and guiding forward revenue and earnings above analyst consensus analyst estimates. Its shares currently trade at 11-12 forward P/E and 4.5 P/B compared to averages of 17.4 and 1.9 for its peers in the electronic components semiconductor group.
Rackspace Hosting Inc. (RAX): RAX is a world leader and specialist in hosting and cloud computing, offering computing-as-a-service, including various types of managed hosting services, to SMEs as well as large enterprises worldwide. On Friday, ten insiders filed SEC Forms 4 indicating that they sold a total of 0.45 million shares for $24.8 million. The large majority were sold by CEO Lanham Napier, who exercised options and sold the resulting 423,278 shares for $23.1 million, ending with 0.43 million shares in direct and 3.72 million shares in indirect holdings after the sale (not including derivative holdings). In comparison, insiders sold a total of 2.2 million shares in the past year.
RAX reported a good Q4 last Monday, beating earnings (18c v/s 16c), but more importantly also revealing that gross margins expanded 280 basis points sequentially in the current quarter and an optimistic outlook for the data center industry in which it competes. A number of brokers upgraded the stock, raising their targets. Its shares, up already over twelve-fold from its lows in 2008-09, are currently trading up over $3 since the report, at near all-time highs at 45-46 forward P/E and 11.9 P/B compared with averages of 122.5 and 3.8 for its peers in the internet services group.
Maxim Integrated Products (MXIM): MXIM engages in the design, development, manufacture and marketing of various linear and mixed-signal ICs worldwide, and it also provides various high-frequency process technologies and capabilities for use in custom designs. On Friday, two insiders, CFO Bruce Kiddoo (25,000 shares) and VP & Principal Acct. Officer David Caron (1,572 shares) filed SEC Forms 4 indicating that they sold a total of 26,572 shares for $0.75 million; with Mr. Kiddoo acquiring the 25,000 shares that he sold as a result of exercising options. In comparison, insiders sold a total of 0.23 million shares in the past year. MXIM reported a mixed Q4 at the end of last month, on January 26th, beating earnings (34c v/s 32c) and missing revenues ($591 million v/s $596 million), and guiding earnings below consensus and revenues in-line; its shares trade at a current 17.1 P/E and 3.3 P/B compared to averages of 15.5 and 2.7 for its peers in the analog & mixed semiconductors group.
Microchip Technology Inc. (MCHP): MCHP manufactures microcontrollers, application-specific standard products, and related mixed-signal and memory products for the consumer, automotive, office automation, communications and industrial markets. On Friday, two insiders, Chairman & CEO Steve Sanghi (147,562 shares) and Director Wade Meyercord (2,500 shares) filed SEC Forms 4 indicating that they exercised options and sold the resulting total of 150,062 shares for $5.6 million. In comparison, insiders sold a total 0.8 million shares in the past year. MCHP trades at a current 18.4 P/E and 3.7 P/B compared to averages of 15.5 and 2.7 for its peers in the analog & mixed semiconductors group.
Polycom Inc. (PLCM): PLCM develops communication products that enable unified video, voice and content collaboration for enterprise, government, education and healthcare customers. On Friday, CEO Andrew Miller filed SEC Form 4 indicating that he exercised options and sold the resulting 30,000 shares for $0.65 million, pursuant to a 10b5-1 plan, and ending with 0.19 million shares after the sale (not including derivative holdings). In comparison, insiders sold a total of 0.27 million shares in the past year. PLCM reported a strong Q4 at the end of last month, in which it beat earnings (41c v/s 29c) and revenue ($407 million v/s $401 million) estimates; its shares are up almost 20% since the report, and they currently trade at a discount 14 forward P/E and 2.8 P/B compared to averages of 31.1 and 3.2 for the wireless equipment group.
On top of these, some additional large insider sales on Friday in the technology sector included:
- a $3.8 million sale by three insiders, pursuant to 10b5-1 plans, at wide-area network optimization solutions provider Riverbed Technology Inc. (RVBD), with the majority of the sales (100,000 shares out of a total of 133,331 shares) by Chairman & CEO Jerry Kennelly;
- a $3.2 million sale by two insiders at Teradyne Inc. (TER), a manufacturer of automatic test equipment products and services worldwide for the automotive, communications, consumer, computer and electronic game markets, with the majority of the sales (177,530 shares out of a total of 185,030 shares) by CEO Michael Bradley;
- a $2.1 million sale by Chief Technology Officer Patrick Melampy, pursuant to a 10b5-1 plan, at Acme Packet Inc. (APKT), a manufacturer of session border controllers, load balancers, routing proxies and multi-service security gateways;
- a $1.2 million sale by Director Alexander Ott, pursuant to a 10b5-1 plan, at business intelligence software provider Qlik Technologies (QLIK); and
- a $1.2 million sale by two insiders, pursuant to 10b5-1 plans, at Seagate Technology (STX), a manufacturer of hard disk drives for the enterprise, desktop, mobile computing, and consumer electronics markets, with the majority of the sales (40,000 shares out of a total of 45,000 shares) by Chairman & CEO Stephen Luczo.
Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.