In this article, I will feature one tech stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
Adobe Systems Incorporated (NASDAQ:ADBE) operates as a diversified software company worldwide.
Insider selling during the last 30 days
Here is a table of Adobe Systems' insider-trading activity during the last 30 days by insider.
| Name | Title | Trade Date | Shares Sold | Rule 10b5-1 | Current Ownership | Decrease In Ownership |
| Mark Garrett | CFO | Oct 1 | 15,000 | Yes | 84,746 shares | 15.0% |
| Shantanu Narayen | CEO | Oct 1 | 50,000 | Yes | 231,672 shares + 638,300 options | 5.4% |
| James Daley | Director | Sept. 20 | 25,000 | No | 15,086 shares | 62.4% |
| Richard Rowley | VP | Sept. 19 | 6,056 | No | 16,981 shares + 12,669 options | 17.0% |
There have been 96,056 shares sold by insiders during the last 30 days. 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 Adobe's insider-trading activity by calendar month.
| Month | Insider selling / shares | Insider buying / shares |
| October 2013 | 65,000 | 0 |
| September 2013 | 96,056 | 0 |
| August 2013 | 65,000 | 0 |
| July 2013 | 813,939 | 0 |
| June 2013 | 450,276 | 0 |
| May 2013 | 0 | 0 |
| April 2013 | 324,073 | 0 |
| March 2013 | 465,962 | 0 |
| February 2013 | 0 | 0 |
| January 2013 | 284,177 | 5,000 |
There have been 2,564,483 shares sold and there have been 5,000 shares purchased by insiders this year.
Financials
Adobe reported the fiscal 2013 third-quarter, which ended August 30, financial results on September 17 with the following highlights:
| Revenue | $995.1 million |
| Net income | $83.0 million |
| Cash | $3.2 billion |
| Debt | $1.5 billion |
Outlook
For the fourth quarter of fiscal 2013, Adobe is targeting a revenue range of $1 billion to $1.05 billion.
Competition
Adobe's competitors include Avid Technology (AVID) and Microsoft (MSFT). Here is a table comparing these companies.
|
Adobe has the highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities this year.
| Company | Insider buying / shares | Insider selling / shares |
| MSFT | 0 | 60,339,723 |
| AVID | 0 | 0 |
Only Adobe has seen intensive insider selling during the past 30 days.
Conclusion
There have been four different insiders selling Adobe and there have not been any insiders buying Adobe during the past 30 days. Three of these four insiders decreased their holdings by more than 10%. Adobe has an insider ownership of 0.38%.
Adobe is trading at a P/E ratio of 59.28 and a forward P/E ratio of 33.23. The company has a book value of $13.56 per share.
Before entering short Adobe, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high P/S ratio and the intensive insider selling activity.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
