Silicon Laboratories: 4 Different Insiders Have Sold Shares During The Last 30 Days

| About: Silicon Laboratories, (SLAB)
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Four insiders sold Silicon Laboratories stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

Two of these four insiders decreased their holdings by more than 10%.

Silicon Laboratories (NASDAQ:SLAB) designs and develops analog-intensive, mixed-signal integrated circuits.

Insider selling during the last 30 days

Here is a table of Silicon Laboratories' insider activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Robert Enloe Director April 16 3,546 Yes 2,992 shares 54.2%
Jonathan Ivester SVP April 8 4,000 Yes 89,787 shares + 11,497 options 3.8%
John Hollister CFO April 1 1,000 Yes 36,804 shares 2.6%
Laurence Walker Director March 31 12,086 Yes 7,171 shares + 6,667 options 46.6%

There have been 20,632 shares sold by insiders during the last 30 days. All these shares were sold pursuant to a Rule 10b5-1 plan.

SEC Rule 10b5-1 is a regulation enacted by the United States Securities and Exchange Commission (SEC) in 2000. The SEC states that Rule 10b5-1 was enacted in order to resolve an unsettled issue over the definition of insider trading, which is prohibited by SEC Rule 10b-5. After Rule 10b5-1 was enacted, the SEC staff publicly took the position that canceling a planned trade made under the safe harbor does not constitute insider trading, even if the person was aware of the inside information when canceling the trade. This staff interpretation raises the possibility that executives can exploit this safe harbor by entering into 10b5-1 trading plans before they have inside information while retaining the option to later cancel those plans based on inside information.

For example, a CEO of a company could call a broker on January 1 and enter into a plan to sell a particular quantity of shares of his company's stock on March 1, find out terrible news about his company on February 1 that will not become public until April 1, and then go forward with the March 1 sale anyway, saving himself from losing money when the bad news becomes public. Under the terms of Rule 10b5-1(b) this is insider trading because the CEO "was aware" of the inside information when he made the trade. But he can assert an affirmative defense under Rule 10b5-1(c), because he planned the trade before he learned the inside information.

In general, it is a safer way for an insider to sell shares pursuant to a Rule 10b5-1 trading plan than without it.

Insider selling by calendar month

Here is a table of Silicon Laboratories' insider activity by calendar month.

Month Insider selling / shares Insider buying / shares
April 2014 8,546 0
March 2014 58,374 0
February 2014 209,743 0
January 2014 60,041 0
December 2013 7,500 0
November 2013 1,500 0
October 2013 35,459 0
September 2013 73,500 0
August 2013 21,512 5,000
July 2013 2,575 0
June 2013 1,575 0
May 2013 1,575 0
April 2013 12,922 0
March 2013 7,275 0
February 2013 17,903 0
January 2013 70,453 0

There have been 590,453 shares sold, and there have been 5,000 shares purchased by insiders since January 2013. The month of February 2014 has seen the most insider selling.


Silicon Laboratories reported the fiscal 2013 full-year, which ended December 28, financial results on January 29 with the following highlights:

Revenue $580.1 million
Net income $49.8 million
Cash $275.4 million
Debt $95.0 million

The four insiders sold their shares after these results.


Silicon Laboratories' first-quarter guidance is as follows:

Revenue $142-$146 million
Non-GAAP EPS $0.40-$0.44
GAAP EPS $0.14-$0.18


Silicon Laboratories' competitors include Analog Devices (NASDAQ:ADI), and Texas Instruments (NYSE:TXN). Here is a table comparing these companies.

Market Cap: 2.18B 16.61B 49.98B
Employees: 1,060 9,100 32,209
Qtrly Rev Growth (yoy): -0.04 0.01 0.02
Revenue: 580.09M 2.64B 12.20B
Gross Margin: 0.61 0.65 0.52
EBITDA: 96.11M 908.12M 4.19B
Operating Margin: 0.12 0.30 0.24
Net Income: 49.82M 694.85M 2.12B
EPS: 1.14 2.20 1.91
P/E: 44.75 24.02 23.99
PEG (5 yr expected): 1.21 1.98 2.03
P/S: 3.74 6.26 4.07

Silicon Laboratories has the highest P/E ratio among these three companies.

Here is a table of these competitors' insider activities this year.

Company Insider buying / shares Insider selling / shares
ADI 0 471,071
TXN 0 1,093,812

Only Silicon Laboratories has seen intensive insider selling during the last 30 days.


There have been four different insiders selling Silicon Laboratories, and there have not been any insiders buying Silicon Laboratories during the last 30 days. Two of these four insiders decreased their holdings by more than 10%. Silicon Laboratories has an insider ownership of 7.32%.

Silicon Laboratories has a $44 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $44 price target. I would place a stop loss at $54, which is the eight-year 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: I have no positions in any stocks mentioned, but may initiate a short position in SLAB over 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.