Top-Tier Insiders at Philip Morris International Inc. (PM) and Two Other Companies Are Jettisoning Shares

Mellanox Technologies Also Had Chairman Unload Some Shares

Let’s wrap up our discussion by examining the insider selling registered at Mellanox Technologies Ltd. (NASDAQ:MLNX). Non-Executive Chairman Irwin Federman offloaded 25,000 ordinary shares on Tuesday at a price of $45.54 per share, after which Mr. Federman continues to own a stake of 31,133 shares. The stake also includes 375 unvested restricted share units (RSUs).

The high-speed server interconnect chip vendor has seen its shares plummet after providing weaker-than-expected revenue guidance for the second quarter despite beating analysts’ bottom- and top-line estimates for the first quarter. Mellanox shares are 7% in the green year-to-date despite having lost 15% in the past month alone. The company anticipates second-quarter revenue in the range of $210 million-to-$215 million, below analysts’ average estimate of $216.8 million. Earlier this year, Mellanox completed the $811 million-acquisition of network-processing semiconductors company EZchip Semiconductor (EZCH) announced in September 2015. The EZchip acquisition, which was funded with cash on hand and $280 million of debt, is set to assist Mellanox in becoming the leading broad-line supplier of intelligent interconnect solutions for the software-defined data centers. Soon after the completion of the deal, analysts at Barclays reinitiated coverage on Mellanox with an ‘Overweight’ rating and a price target of $58, saying that “EZCH will accelerate MLNX’s intelligence offerings in its current product line-up”.

Mellanox Technologies boasts a forward P/E multiple of 10.9, which below the ratio of 14.2 for the Semiconductors industry. There were 30 money managers from our system with stakes in Mellanox at the end of 2016, who amassed approximately 17% of the company’s shares. Jim Simons’ Renaissance Technologies was the holder of 935,583 shares of Mellanox Technologies Ltd. (NASDAQ:MLNX) on December 31.

Disclosure: None