Insider Trading 06 July 2012: Insiders Selling 11.6 Times More Stock than Buying Stock

July 9th, 2012
in contributors

by Asif Suria

Insider buying increased slightly with insiders purchasing $37.6 million of their stock last week compared to $37.2 million in the week prior. Selling also increased with insiders selling $435.1 million worth of stock last week compared to $340.6 million in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 11.6. In other words, insiders sold almost 12 times as much stock as they purchased.

Follow up:

The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 9.1. We are calculating an adjusted ratio by removing transactions by funds and companies and trying as best as possible only to retain information about insiders and 10% owners who are not funds or companies.

Insider Sell Buy Ratio July 6, 2012

Insider Sell Buy Ratio July 6, 2012

Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

Notable Insider Buys:

1. Opko Health, Inc. (OPK): $4.67

CEO & Chairman Phillip Frost M.D.  acquired 187,500 shares of this medical devices and drug development company, paying $4.68 per share for a total amount of $877,855. These shares were purchased indirectly by Frost Gamma Investments Trust.

You can view the list of recent insider transactions for Opko Health, Inc. here.

P/E: N/A Forward P/E: N/A Industry P/E: 20.3
P/S: 47.23 Price/Book: 9.09 EV/EBITDA: -61.97
Market Cap: $1.38B Avg. Daily Volume: 1,340,280 52 Week Range: $3.49 – $5.85

2. Synta Pharmaceuticals Corp. (SNTA): $6.53

Shares of this biotech company were acquired by 2 insiders:

  • Director Keith R. Gollust acquired 150,000 shares, paying $5.35 per share for a total amount of $801,900. These shares were purchased indirectly by Wyandanch Partners, L.P.
  • President and CEO Safi R. Bahcall acquired 10,000 shares, paying $5.34 per share for a total amount of $53,370. Mr. Bahcall increased his stake by 0.43% to 2,343,135 shares with this purchase.

Mr. Gollust has served as Chairman of the Board since September 2002 and is a private investor. His previous insider transaction was a 100,000 share purchase last April at an average price of $4.89 per share. Billionaire and hedge fund manager Bruce Kovner of Caxton Associates picked up shares of Synta several times last fall and winter when the stock dipped below $4. He then followed those purchases with a  $5 million purchase through a secondary offering by the company in January as you can see from this page. The company is still in its drug discovery phase and hence burnt through $15 million in cash last quarter. The company has $41 million in net cash on its balance sheet.

You can view the list of recent insider transactions for Synta Pharmaceuticals Corp. here.

P/E: N/A Forward P/E: N/A Industry P/E: 33.39
P/S: 55.79 Price/Book: 10.89 EV/EBITDA: -7.02
Market Cap: $376.19M Avg. Daily Volume: 784,664 52 Week Range: $3.02 – $8.5

3. Williams-Sonoma Inc. (WSM): $35.85

Director Adrian T. Dillon acquired 7,555 shares of this specialty retailer of home products, paying $33.14 per share for a total amount of $250,353. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Williams-Sonoma Inc. here.

P/E: 15.98 Forward P/E: 12.94 Industry P/E: 14.36
P/S: 0.96 Price/Book: 2.99 EV/EBITDA: 6.17
Market Cap: $3.56B Avg. Daily Volume: 1,906,360 52 Week Range: $27.9 – $40.76

4. Laredo Petroleum Holdings, Inc. (LPI): $21.7

Director Myles W. Scoggins acquired 5,000 shares of this Independent Oil & Gas company, paying $20.75 per share for a total amount of $103,750. Mr. Scoggins increased his stake by 62.47% to 13,004 shares with this purchase.

You can view the list of recent insider transactions for Laredo Petroleum Holdings, Inc. here.

P/E: 21.77 Forward P/E: 15.96 Industry P/E: 15.97
P/S: 5.01 Price/Book: 3.51 EV/EBITDA: 7.76
Market Cap: $2.75B Avg. Daily Volume: 339,362 52 Week Range: $17.25 – $27.91

5. AAR Corp. (AIR): $13.66

Director Michael Ross Boyce acquired 7,500 shares of this aerospace products and services company, paying $11.82 per share for a total amount of $88,650. Mr. Boyce increased his stake by 17.67% to 49,938 shares with this purchase.

You can view the list of recent insider transactions for AAR Corp. here.

P/E: 7.38 Forward P/E: 8.48 Industry P/E: 14.52
P/S: 0.28 Price/Book: 0.61 EV/EBITDA: 5.77
Market Cap: $528.20M Avg. Daily Volume: 504,236 52 Week Range: $10 – $31.66

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Seagate Technology PLC (STX): $24.955

Shares of this data storage company were sold by 2 insiders:

  • Chairman, President and CEO Stephen J. Luczo sold 500,000 shares for $24.43, generating $12.2 million from the sale. These shares were sold indirectly through a trust.
  • EVP,General Counsel, CAO Kenneth M. Massaroni sold 40,000 shares for $24.67, generating $986,984 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

You can view the list of recent insider transactions for Seagate Technology PLC here.

P/E: 5.64 Forward P/E: 3.05 Industry P/E: 15.55
P/S: 0.8 Price/Book: 2.96 EV/EBITDA: 3.73
Market Cap: $10.61B Avg. Daily Volume: 14,259,500 52 Week Range: $9.05 – $32.55

2. The Ensign Group, Inc. (ENSG): $27.84

Shares of this nursing and rehabilitative care provider were sold by 5 insiders:

  • Director Roy E. Christensen sold 236,188 shares for $28.32, generating $6.7 million from the sale. These shares were sold indirectly through a trust.
  • President & CEO Christopher R. Christensen sold 68,800 shares for $28.67, generating $1.97 million from the sale. These shares were sold indirectly through an entity.
  • Executive Vice President Gregory K. Stapley sold 36,000 shares for $28.84, generating $1.04 million from the sale. These shares were sold indirectly through a trust.
  • President of a Subsidiary Covey C. Christensen sold 16,584 shares for $29.00, generating $480,936 from the sale.
  • VP & General Counsel Beverly B. Wittekind sold 2,000 shares for $29.00, generating $58,000 from the sale.

You can view the list of recent insider transactions for The Ensign Group, Inc. here.

P/E: 12.6 Forward P/E: 10.59 Industry P/E: 13.71
P/S: 0.78 Price/Book: 2.07 EV/EBITDA: 6.64
Market Cap: $594.16M Avg. Daily Volume: 102,095 52 Week Range: $19.61 – $32.01

3. Middleby Corp. (MIDD): $99.165

CEO, Chairman, President Selim A. Bassoul sold 100,000 shares of this commercial food processing equipment company for $100.00, generating $10 million from the sale.

You can view the list of recent insider transactions for Middleby Corp. here.

P/E: 18.44 Forward P/E: 14.78 Industry P/E: 15.38
P/S: 2.1 Price/Book: 3.51 EV/EBITDA: 12.15
Market Cap: $1.86B Avg. Daily Volume: 95,211 52 Week Range: $65.39 – $104.82

4. ServiceNow, Inc. (NOW): $25.84

Chief Product Officer Frederic B. Luddy sold 397,500 shares of this information technology company for $18.00, generating $7.2 million from the sale.

You can view the list of recent insider transactions for ServiceNow, Inc. here.

P/E: N/A Forward P/E: N/A Industry P/E: 16.18
P/S: 18.48 Price/Book: N/A EV/EBITDA: -266.6
Market Cap: $3.11B Avg. Daily Volume: 2,575,260 52 Week Range: $22.83 – $26.26

5. Gas Natural Inc. (EGAS): $10.19

Chairman and CEO Richard M. Osborne sold 700,000 shares of this gas utility for $10.10, generating $7.1 million from the sale. These shares were sold indirectly through a trust. This sale was a result of a secondary offering by the CEO.

You can view the list of recent insider transactions for Gas Natural Inc. here.

P/E: 18.98 Forward P/E: 14.99 Industry P/E: 19.11
P/S: 0.89 Price/Book: 1.07 EV/EBITDA: 8.93
Market Cap: $83.10M Avg. Daily Volume: 14,022 52 Week Range: $9.54 – $11.99

 

You can view the full list of sales from this Insider Sales page.

 

About the Author


Asif Suria

Asif Suria is the founder and editor of Insider Trade Reports, a service that provides daily reports on insider activity and rates the top insider purchases and sales using a proprietary model. He also maintains a Merger Arbitrage tool that displays real-time spreads and covers mergers and acquisitions on a weekly basis.



 















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