Citron Research is an activist firm known for its infamous short positions over the years. This time Citron is setting its sights on Mobileye N.V. (NYSE: MBLY) after previously targeting NVIDIA Corp. (NASDAQ: NVDA) in the space. Citron released a report on Friday explaining its stance.

Eight weeks ago, NVIDIA was trading around $119, and at that point Citron recommended investors short the stock due to an overenthusiastic market. The firm gave a price target of close to $90 in the near term.

During this period the stock actually dropped closer to the $100 level, generating a solid return of about 16%.

Now Citron is closing its position in NVIDIA and shifting its focus to Mobileye. The firm is shorting Mobileye with a short-term price target of $35, implying a downside of nearly 26% from the current price level. Citron pointed to a few statistics about Mobileye that help explain its position:

• Valuation (NTM Period) is 36-times EBITDA.
• LTM R&D as % of Enterprise Value is 0.7%.
• R&D (LTM) totaled $65 million.
• Free Cash Flow (FCF) totaled (LTM) $151 million (1.5% of EV).

Perhaps the most important point that Citron made was that insider sales for Mobileye have been massive over the past year. Insider sales at Mobileye since January 2016 have totaled over $250 million, which is over 350% of LTM R&D and over 150% of FCF. In the same time, NVIDIA insider sales totaled roughly $120 million, making up 9% of LTM R&D and 8% of FCF.

Keep in mind that Mobileye has a total market cap of just over $10 billion.

Shares of Mobileye were last seen down 2% at $47.12, with a consensus analyst price target of $56.95 and a 52-week trading range of $30.00 to $51.15.

NVIDIA was trading at $100.82, in a 52-week range of $31.04 to $120.92. The consensus price target is $113.59.

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