Time To Sell Or More Gains Ahead? – Inseego Corp. (INSG), Proofpoint Inc. (PFPT)

Inseego Corp. (NASDAQ: INSG) shares are 55.73% up in the year-to-date (YTD) period and have moved -0.57% or -$0.07 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +191.94% lower. Comparatively, the stock is -25.15% down YTD and 13.92% over the trailing 3-month period. If we look at the shorter duration, its week performance is 4.63% and -21.60% over the month.

Analyst Recommendations

On August 06, 2020, Northland Capital recommended the INSG stock is a Market Perform, while earlier, ROTH Capital had Downgrade the stock as a Neutral on August 06, 2020. 6 analysts offering the recommendations for the stock have a consensus rating of 1.90 to suggest that the INSG stock is a “Strong Buy. 0 of the 6 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 4 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $11.41 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $13.67. The forecasts give the Inseego Corp. stock a price target range of $17.00 on the higher side while at least one analyst think the stock could plunge to a low of $10.50. The two limits represent an upside potential of 32.88% or -8.67%.

Earnings Forecast

Analysts estimate the earnings to decrease 0.00% in the current quarter to $0, up from the -$0.04 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$0.06, up 36.60% from -$0.21 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0 and $0.03. Wall Street estimates earnings per share to be at an average of $0.25 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 16 over the last 12 months, while SEC filings reveal that there have been 9 insider sales over the same period. Insiders have purchases 169,216 shares while those sold by company executives and officers stand at 96,450. The last 3 months have seen insiders trade a total of 100,032 and 96,450 in purchases and sales respectively.

SMITH STEPHEN M, a Chief Financial Officer at the company, sold 12,590 shares worth $0.18 million at $14.25 per share on Aug 03. The EVP of Operations had earlier sold another 20,000 INSG shares valued at $0.3 million on Aug 05. The shares were sold at $15.00 per share. Kahn Doug (EVP of Operations) sold 20,000 shares at $13.00 per share on Jul 29 for a total of $0.26 million while SMITH STEPHEN M, (Chief Financial Officer) sold 10,057 shares on Jul 20 for $0.11 million with each share fetching $11.32.

Proofpoint Inc. (NASDAQ:PFPT), on the other hand, is trading around $115.39 with a market cap of $6.66B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $144.17 and spell out a more modest performance – a 19.96% return. Some analysts are even forecasting $1.68 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Proofpoint Inc. (PFPT) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

PFPT’s operating margin was negative on the trailing 12 months basis, remaining steady at -10.20%, while the operating expenses over the recent quarter were at $186.73 million. This represented a 12.92% of the company’s total revenues which amounted $214.44 million. With this in place, we can see that the company’s diluted EPS declined -$0.52 on the year-over-year period, shrinking to -$0.67 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $1.31 billion from $1.27 billion over the previous quarter. Short term investments amounted to $33.01 million while total current assets were at $417.47 million. The cash flow from operating activities totaled $97.51 million, significantly higher than the $64.99 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $83.66 million.

Insider activity

Insiders have transacted a total of 83 times at Proofpoint Inc. over the last 6 months, with insider purchases undertaken 33 times and accounting for 79,106 shares. Insider sales totaled 185,496 shares over the same period, with these deals completed in 50 transactions. Looking at these numbers, we realize that net purchases over that period are -17.0 shares. Insiders now hold a total of 952.24k shares after the latest sales, with -8.20% net shares purchased.

Major holders

Insiders own 0.40% of the company shares, while shares held by institutions stand at 97.00% with a share float percentage of 56.79M. Investors are also buoyed by the number of investors in a company, with Proofpoint Inc. having a total of 475 institutions that hold shares in the company. The top two institutional holders are Price (T.Rowe) Associates Inc with over 6.46 million shares worth more than $717.98 million. As of Jun 29, 2020, Price (T.Rowe) Associates Inc held 11.21% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 5.34 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $593.64 million and represent 9.27% of shares outstanding.