July 15th, 2012
by Asif Suria
Insider buying increased significantly with insiders purchasing $133 million of their stock last week compared to $37.6 million in the week prior. Selling also increased with insiders selling $645.9 million worth of stock last week compared to $435.1 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 dropped down to 4.9. In other words, insiders sold almost 5 times as much stock as they purchased.
The Sell/Buy ratio this week compares unfavorably with the week prior when the ratio stood at 11.6. 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.
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. Navistar International Corporation (NAV): $23.44
We normally do not feature purchases by 10% owners but felt that this purchase by activist investor Carl Icahn and his former associate Mark Rachesky was worth mentioning. Shares of this truck and diesel engine manufacturer were acquired by two insiders:
- 10% Owner Mark H. Rachesky acquired 1,074,163 shares, paying $24.18 for a total amount of $25.98 million.
- 10% Owner Carl C. Icahn acquired 870,911 shares, paying $22.91 for a total amount of $19.95 million.
You can view the list of recent insider transactions for Navistar International Corporation here.
|P/E: 1.27||Forward P/E: 7.33||Industry P/E: 12.14|
|P/S: 0.11||Price/Book: N/A||EV/EBITDA: 15.06|
|Market Cap: $1.61B||Avg. Daily Volume: 3,176,260||52 Week Range: $20.21 – $55.15|
2. VeriFone Systems, Inc (PAY): $36.59
CEO Douglas Bergeron acquired 155,000 shares of this payment systems provider, paying $32.50 per share for a total amount of $5.04 million. These shares were purchased indirectly by DGB Investments.
We reported on Verifone several times last year because of insider sales. The tables have now turned and this is the first insider purchase we have seen as you can see from this page. The stock is down significantly, losing nearly 40% of its value over the last three months prior to this purchase but remains expensive trading at over 18 times EBITDA.
You can view the list of recent insider transactions for VeriFone Systems, Inc here.
|P/E: 17.16||Forward P/E: 11.26||Industry P/E: 14.09|
|P/S: 2.34||Price/Book: 3.04||EV/EBITDA: 18.79|
|Market Cap: $3.95B||Avg. Daily Volume: 3,584,940||52 Week Range: $30.1 – $55.89|
3. Opko Health, Inc. (OPK): $4.62
CEO & Chairman Phillip Frost M.D. acquired 347,500 shares of this medical devices and drug development company, paying $4.62 per share for a total amount of $1.6 million. These shares were purchased indirectly by 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: 20.28|
|P/S: 45.75||Price/Book: 8.8||EV/EBITDA: -61.28|
|Market Cap: $1.36B||Avg. Daily Volume: 1,274,940||52 Week Range: $3.49 – $5.85|
4. Deckers Outdoor Corp. (DECK): $46.98
CEO Angel R. Martinez acquired 10,000 shares of this footwear and outdoor accessories company, paying $45.90 per share for a total amount of $459,034. Mr. Martinez increased his stake by 2.97% to 346,740 shares with this purchase.
As we tweeted on Friday, this purchase was very interesting in light of the 6 month “short swing” rule. It appears that Mr. Martinez waited exactly 6 months before making his purchase in order not to forfeit gains from his January 10th sale at $85/share.
You can view the list of recent insider transactions for Deckers Outdoor Corp. here.
|P/E: 9.81||Forward P/E: 8.64||Industry P/E: 14.5|
|P/S: 1.26||Price/Book: 2.16||EV/EBITDA: 5.26|
|Market Cap: $1.81B||Avg. Daily Volume: 1,911,090||52 Week Range: $42.16 – $118.9|
5. Smithfield Foods, Inc. (SFD): $18.9
Shares of this meat products company were acquired by 2 insiders:
- President and C.E.O. Larry C. Pope acquired 10,000 shares, paying $19.26 per share for a total amount of $192,600. Mr. Pope increased his stake by 1.32% to 767,951 shares with this purchase.
- Executive Vice President Dhamu R. Thamodaran acquired 10,000 shares, paying $19.14 per share for a total amount of $191,425. Mr. Thamodaran increased his stake by 15.07% to 76,350 shares with this purchase.
You can view the list of recent insider transactions for Smithfield Foods, Inc. here.
|P/E: 8.55||Forward P/E: 6.92||Industry P/E: 9.99|
|P/S: 0.22||Price/Book: 0.87||EV/EBITDA: 4.48|
|Market Cap: $2.93B||Avg. Daily Volume: 2,367,930||52 Week Range: $17.79 – $25.12|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Credit Acceptance Corp. (CACC): $94.99
Director Scott J. Vassalluzzo sold 644,124 shares of this credit services company for $84.45, generating $54.4 million from the sale. These shares were sold indirectly by various trust and entities.
You can view the list of recent insider transactions for Credit Acceptance Corp. here.
|P/E: 12.79||Forward P/E: 10.89||Industry P/E: 12.41|
|P/S: 5.22||Price/Book: 4.18||EV/EBITDA: N/A|
|Market Cap: $2.47B||Avg. Daily Volume: 34,751||52 Week Range: $56.55 – $107.09|
2. Toll Brothers Inc. (TOL): $29.71
Shares of this luxury home builder were sold by 2 insiders:
- Director Bruce E. Toll sold 300,000 shares for $30.13, generating $9.04 million from the sale.
- Director Robert S. Blank sold 16,000 shares for $29.40, generating $470,398 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 Toll Brothers Inc. here.
|P/E: 71.08||Forward P/E: 31.61||Industry P/E: 12.33|
|P/S: 3.27||Price/Book: 1.89||EV/EBITDA: 54.61|
|Market Cap: $4.98B||Avg. Daily Volume: 4,299,670||52 Week Range: $13.16 – $30.47|
3. Cedar Fair, L.P. (FUN): $31.77
Director Richard L. Kinzel sold 171,101 shares of this general entertainment company for $30.89, generating $5.3 million from the sale.
You can view the list of recent insider transactions for Cedar Fair, L.P. here.
|P/E: 19.42||Forward P/E: 12.22||Industry P/E: 28.9|
|P/S: 1.68||Price/Book: 24.05||EV/EBITDA: 9.61|
|Market Cap: $1.76B||Avg. Daily Volume: 335,364||52 Week Range: $16.44 – $31.86|
4. The Ensign Group, Inc. (ENSG): $27.66
Director Roy E. Christensen sold 88,712 shares of this nursing and rehabilitative care provider for $27.71, generating $2.5 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for The Ensign Group, Inc. here.
|P/E: 12.52||Forward P/E: 10.52||Industry P/E: 13.33|
|P/S: 0.75||Price/Book: 1.98||EV/EBITDA: 6.52|
|Market Cap: $590.32M||Avg. Daily Volume: 110,062||52 Week Range: $19.61 – $30.65|
5. Medivation, Inc. (MDVN): $91.21
President and CEO David Hung sold 25,000 shares of this biotech company for $95.05, generating $2.4 million from the sale.
You can view the list of recent insider transactions for Medivation, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 19.6|
|P/S: 40||Price/Book: 40.79||EV/EBITDA: -96.16|
|Market Cap: $3.31B||Avg. Daily Volume: 731,494||52 Week Range: $14.32 – $96.8|
You can view the full list of sales from this Insider Sales page.
About the Author
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.