Insiders made noteworthy buys last week (May 7th to 11th, 2012) in several tech company stocks that are making strong moves. In this article we review noteworthy insider buys in three falling tech stocks, either plunging on negative news or moving lower to near all-time lows, in addition to noteworthy trades in several other tech companies.
Insider buys-- especially unusually large ones-- in such stocks that have plunged recently, may give bulls comfort that the long-term fundamentals may be intact and that a turn may be under-way in the next couple of quarters. On the other hand, sells at depressed prices after the plunge may lend even further credence to the bear thesis. Similarly, noteworthy buys in surging stocks may give investors some confidence that knowledgeable insiders are finding value at such elevated prices after a strong surge.
The transactions in this article were selected based on a review of over 1,850 separate SEC Form 4 (insider trading) filings last week, as part of our daily and weekly coverage of insider trades. 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:
Windstream Corp. (WIN): WIN provides communications and technology solutions in the U.S., including IP-based voice and data services, multi-protocol label switching networking, data center and managed services, hosting services, and communications systems to business and government agencies. In addition, it also provides high-speed Internet, voice, and digital television services to residential customers primarily located in rural areas. On Friday, six insiders-- including the Chairman, CFO, an SVP and three Directors-- filed SEC Forms 4 indicating that they purchased 85,500 shares for $0.85 million. In comparison, insiders purchased 0.15 million shares in the past year.
WIN shares plunged last week after the company reported its Q4 (March) on Thursday morning before the market opened, indicating that it missed analyst revenue and earnings estimates (13c v/s 14c), mostly on account of a fall in wholesale revenues. After the fall, its shares now trade at 15-16 forward P/E and 4.1 P/B compared to averages of 33.0 and 3.9 for its peers in the regional wireless group, while earnings are projected to fall from 79c in 2011 to 58c in 2012 and then rebound to 64c in 2013. Also, the company pays a rich 10.1% dividend, among the highest in the group.
Besides WIN, insiders also bought shares in two other tech companies trading at their lows, including:
- Triquint Semiconductor (TQNT), that manufactures a broad range of high-performance RF, analog and mixed-signal ICs, in which two insiders purchased 21,500 shares for $0.10 million. TQNT shares are down from a high of $15 last year, closing Friday at $4.01. Also, in comparison, insiders purchased 73,773 shares in the past two years.
- Power One Inc. (PWER), that designs, manufactures, and markets power conversion and power management solutions for the renewable energy, communications infrastructure, and other high technology markets, in which CFO Gary Larsen purchased 15,000 shares for $0.06 million. Also, in comparison, insiders purchased 45,000 shares in the past two years.
In addition to the above, insiders also made noteworthy share purchases last week in the following two tech companies:
- Universal Display Corp. (PANL), that is a designer of organic light emitting diode (OLED) devices for use in flat panel displays, solid-state lighting, and other applications mostly in the consumer electronics market, in which Robert Citrone, an insider by virtue of 10% ownership of the company via Discovery Capital Management, purchased 100,000 shares for $4.1 million, increasing his holdings to 6.11 million shares in direct and indirect shares of the company.
- PMC Sierra Inc. (PMCS), that designs, develops, markets and supports high-performance internet infrastructure semiconductor networking solutions that enable the transportation and storage of large quantities of digital data, in which Director Richard Nottenburg purchased 7,500 shares for $48,712, increasing his holdings to 29,005 shares. This is the first insider purchase on record at least in the past two years.
In addition to the above, insiders also reported large sales last week in the tech sector stocks in:
- Teradata Corp. (TDC), a company focused on raising intelligence through data warehousing and enterprise analytics, in which seven insiders sold 190,385 shares for $14.1 million, in comparison to 0.52 million shares sold by insiders in the past year;
- Rackspace Hosting Inc. (RAX), 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, in which tow insiders sold 202,738 shares for $10.6 million, in comparison to 2.55 million shares sold by insiders in the past year;
- Ubiquiti Networks Inc. (UBNT), that offers a portfolio of wireless networking products and solutions to network operators and service provider worldwide, including standalone and integrated radios, directional and sector antennas, and network management tools, in which Chief Technology Officer John Sanford sold 100,000 shares for $2.51 million, in comparison to 0.98 million shares sold by insiders in the past year; and
- 3D graphics processor designer and developer NVIDIA Corp. (NVDA), in which CEO Jen Hsun Huang sold 164,267 shares for $2.0 million, in comparison to 3.04 million shares sold by insiders in the past year.
Credit: Fundamental data in this article and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, 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.