Insider Trading 27 July 2012: Bill Gates Unloads Over 4 Million Shares of Microsoft

July 29th, 2012
in contributors

by Asif Suria

Insider buying increased with insiders purchasing $135.1 million of their stock last week compared to $43.5 million in the week prior. Selling also increased with insiders selling $933.6  million worth of stock last week compared to $296.7 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 6.9. In other words, insiders sold almost 7 times as much stock as they purchased. The Sell/Buy ratio this week was essentially flat from last week when the ratio stood at 6.8.

Follow up:

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 27, 2012

Insider Sell Buy Ratio July 27, 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. Yahoo! Inc. (YHOO): $16.11

Shares of Yahoo were acquired by 2 insiders:

  • Director Daniel S. Loeb acquired 2,500,000 shares, paying $15.77 per share for a total amount of $39.4 million. These shares were purchased indirectly through Third Point LLC.
  • Director Michael J. Wolf acquired 24,000 shares, paying $15.83 per share for a total amount of $380,030. Mr. Wolf increased his stake by 67.57% to 59,519 shares with this purchase.

It is interesting to see Dan Loeb as well as his nominee to the board of directors, Michael Wolf, purchase shares of Yahoo following the appointment of Marissa Mayer as the new CEO of the company.

You can view the list of recent insider transactions for Yahoo! Inc. here.

P/E: 18.12 Forward P/E: 13.77 Industry P/E: 24.33
P/S: 3.88 Price/Book: 1.55 EV/EBITDA: 13.7
Market Cap: $19.68B Avg. Daily Volume: 15,866,600 52 Week Range: $11.09 – $16.79

2. Navistar International Corporation (NAV): $23.68

10% Owner Carl C. Icahn acquired 974,272 shares of this truck and diesel engine manufacturer, paying $22.9 for a total amount of $22.3 million.

You can view the list of recent insider transactions for Navistar International Corporation here.

P/E: 1.28 Forward P/E: 8.03 Industry P/E: 12.32
P/S: 0.11 Price/Book: N/A EV/EBITDA: 15.11
Market Cap: $1.62B Avg. Daily Volume: 3,186,380 52 Week Range: $20.21 – $52.36

3. NVR Inc. (NVR): $779.13

Director Dwight C. Schar acquired 10,000 shares of this home builder, paying $733.22 per share for a total amount of $7.3 million. Mr. Schar increased his stake by 14.18% to 80,523 shares with this purchase.

Mr. Schar founded NVR in 1977 and has weathered several booms and busts in the housing industry. Following a bankruptcy in the early 1990′s, the company has been managed conservatively and survived the recent housing bust in better shape than some of its peers.

The recent sell-off in the stock from $866 to current levels might have prompted this rare insider purchase by Mr. Schar, who has in the past been known for exercising options and selling large quantities of NVR stock. While Q2 revenue increased 11% and earnings increased 38% year-over-year, the company also reported a higher cancellation rate of 16.3% when compared to 12.5% last year. NVR is one of the few homebuilders (if not the only one) that has net cash on its balance sheet and no long-term debt. Trading at 13.5 times EBITDA and 2.5 times book value (when I wrote this and before the run-up in the stock last week), the stock isn’t exactly cheap despite the recent drop in the stock price.

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

P/E: 28.56 Forward P/E: 16.47 Industry P/E: 12.23
P/S: 1.39 Price/Book: 2.58 EV/EBITDA: 14.64
Market Cap: $4.00B Avg. Daily Volume: 46,731 52 Week Range: $554.71 – $879.99

4. Dole Food Company Inc. (DOLE): $11.06

Chairman David H. Murdock acquired 278,800 shares of this fresh fruits and vegetables producer, paying $10.15 per share for a total amount of $2.8 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Dole Food Company Inc. here.

P/E: 26.91 Forward P/E: 7.73 Industry P/E: 18.82
P/S: 0.13 Price/Book: 1.17 EV/EBITDA: 8.65
Market Cap: $970.61M Avg. Daily Volume: 772,697 52 Week Range: $8.02 – $14.34

5. Nanosphere, Inc. (NSPH): $2.99

Director Mark Slezak acquired 1 million shares of this molecular diagnostic products company, paying $2.40 per share for a total amount of $2.4 million.

We mentioned Nanosphere last month after a 309,075 share purchase by Mr. Slezak. We wrote the following about Mr. Slezak and his purchase back then, “Mr. Slezak has served on Nanosphere’s board since 2000 and is the Chairman of the Board. He owns almost 27% of the company through various entities and investment funds he represents. You can read a short bio on Mr. Slezak here.

Nanosphere is a molecular diagonistic company with a focus on infectious diseases and cardiovascular diseases. Despite the fact that the company was founded 14 years ago and went public in 2007, it feels like it is still in its infancy as annual revenues have been just north of $2 million for three years and the company is bleeding a lot of cash.

The company believes it has a clear path to profitability when it expands to 400 customers paying $200,000 a year at a gross margin of 60%. The company currently has an installed base of 141 customers and gross margins are running at 30%. Nanosphere has $31.76 million in net cash on its balance sheet, which it will most likely burn through in a year.”

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

P/E: N/A Forward P/E: N/A Industry P/E: 19.22
P/S: 40.95 Price/Book: 3.42 EV/EBITDA: -3.1
Market Cap: $130.71M Avg. Daily Volume: 851,105 52 Week Range: $0.89 – $3.57

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $29.755

Founder Bill Gates sold 4,250,000 shares of Microsoft for $29.21, generating $124.2 million from the sale.

You can view the list of recent insider transactions for Microsoft Corporation here.

P/E: 14.88 Forward P/E: 8.91 Industry P/E: 24.81
P/S: 3.31 Price/Book: 3.68 EV/EBITDA: 6.46
Market Cap: $249.38B Avg. Daily Volume: 44,496,500 52 Week Range: $23.79 – $32.95

2. Marriott International, Inc. (MAR): $36.89

Shares of this hotel company were sold by 2 insiders:

  • Chairman of the Board J W. Marriott Jr. sold 70,000 shares for $37.02, generating $2.6 million from the sale.
  • President Americas Division David Grissen sold 49,220 shares for $35.99, generating $1.8 million from the sale. 24,220 of 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 Marriott International, Inc. here.

P/E: 61.08 Forward P/E: 18.35 Industry P/E: 39.02
P/S: 3.93 Price/Book: N/A EV/EBITDA: 14.3
Market Cap: $11.91B Avg. Daily Volume: 3,388,110 52 Week Range: $25.49 – $40.45

3. JB Hunt Transport Services Inc. (JBHT): $55.35

Shares of this trucking company were sold by 2 insiders:

  • Chairman of the Board James K. Thompson sold 42,259 shares for $54.89, generating $2.3 million from the sale.
  • EVP and Chief Operations Officer Alfred C. Harper sold 25,600 shares for $55.04, generating $1.4 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President and CEO John N. Roberts sold 18,150 shares for $54.30, generating $985,581 from the sale.

You can view the list of recent insider transactions for JB Hunt Transport Services Inc. here.

P/E: 22.94 Forward P/E: 18.15 Industry P/E: 18.54
P/S: 1.33 Price/Book: 8.97 EV/EBITDA: 10.01
Market Cap: $6.51B Avg. Daily Volume: 974,103 52 Week Range: $34.42 – $61.18

4. AutoZone Inc. (AZO): $374.79

Director William Andrew McKenna sold 10,000 shares of this auto parts retailer for $375.48, generating $3.8 million from the sale.

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

P/E: 16.73 Forward P/E: 13.82 Industry P/E: 20.05
P/S: 1.65 Price/Book: N/A EV/EBITDA: 9.73
Market Cap: $14.03B Avg. Daily Volume: 490,768 52 Week Range: $266.25 – $399.1

5. Packaging Corp. of America (PKG): $30.77

Shares of this packaging products company were sold by 6 insiders:

  • Executive Chairman Paul T. Stecko sold 62,400 shares for $30.00, generating $1.9 million from the sale.
  • Executive VP Thomas A. Hassfurther sold 19,360 shares for $30.52, generating $590,816 from the sale. These shares were sold indirectly by Mr. Hassfurther’s spouse.
  • Senior VP & CFO Richard B. West sold 11,393 shares for $30.00, generating $341,785 from the sale.
  • CEO Mark W. Kowlzan sold 11,393 shares for $30.00, generating $341,790 from the sale.
  • VP Human Resources Stephen T. Calhoun sold 7,800 shares for $30.00, generating $233,980 from the sale.
  • VP, General Counsel & Secretary Kent A. Pflederer sold 4,160 shares for $29.99, generating $124,773 from the sale.

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

P/E: 21.05 Forward P/E: 12.98 Industry P/E: 17.55
P/S: 1.09 Price/Book: 3.2 EV/EBITDA: 6.53
Market Cap: $2.96B Avg. Daily Volume: 619,714 52 Week Range: $21.05 – $31.12

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

Other posts by Asif Suria

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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