Insider Trading 03 August 2012: Bill Gates Sells Another 10 Million Shares of Microsoft

August 5th, 2012
in contributors

by Asif Suria

Insider buying declined with insiders purchasing $43.8 million of their stock last week compared to $135.1 million in the week prior. Selling on the other hand increased with insiders selling $1.68 billion worth of stock last week compared to $933.6 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 38.4. In other words, insiders sold more than 38 times as much stock as they purchased. The Sell/Buy ratio this week was up sharply from last week when the ratio stood at 6.9.

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 August 3, 2012

Insider Sell Buy Ratio August 3, 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. Dole Food Company Inc. (DOLE): $12.12

Chairman David H. Murdock acquired 617,400 shares of this fresh fruits and vegetables producer, paying $11.78 per share for a total amount of $7.3 million. These shares were purchased indirectly through a trust.

Despite a nice bump in the stock price since Mr. Murdock’s $2.8 million purchase  we reported on last week, he has continued buying shares of Dole.

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

P/E: 29.49 Forward P/E: 8.48 Industry P/E: 20.29
P/S: 0.15 Price/Book: 1.16 EV/EBITDA: 8.92
Market Cap: $1.06B Avg. Daily Volume: 895,188 52 Week Range: $8.02 – $13.56

2. Opko Health, Inc. (OPK): $4.29

CEO & Chairman Phillip Frost M.D. acquired 600,000 shares of this medical devices and drug development company, paying $4.21 per share for a total amount of $2.5 million. 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: 20.83
P/S: 40.79 Price/Book: 7.85 EV/EBITDA: -56.75
Market Cap: $1.27B Avg. Daily Volume: 1,140,970 52 Week Range: $3.49 – $5.85

3. AT&T, Inc. (T): $37.58

Director Scott T. Ford acquired 55,000 shares of AT&T, paying $37.43 per share for a total amount of $2.1 million.

Mr. Ford was appointed to AT&T’s board last month and since new directors often purchase shares of the company, I would not read much into this purchase.

You can view the list of recent insider transactions for AT&T, Inc. here.

P/E: 50.17 Forward P/E: 14.62 Industry P/E: 28.69
P/S: 1.71 Price/Book: 2.11 EV/EBITDA: 7.9
Market Cap: $218.15B Avg. Daily Volume: 28,836,400 52 Week Range: $27.29 – $38.28

4. Symantec Corporation (SYMC): $16.8

Chairman, President & CEO Stephen M. Bennett acquired 89,300 shares of this software security and storage company, paying $15.75 per share for a total amount of $1.4 million. These shares were purchased indirectly through a trust.

Symantec is a troubled software company that recently booted its CEO out. The company scores very well on our model and almost made the cut for this week’s focus article but the company has its work cut out for it in the coming years. The company went on an acquisition binge and even decided to outsource its internal IT to HP. That was a signal that management had no clue what it was doing as you can’t really run an IT company if you outsource your IT division to another technology company and then bring them back in as “consultants”.

For years, the University of Oregon used Symantec’s Norton products as the company had a physical support presence in Eugene, Oregon. But the University eventually decided to switch to McAfee and Symantec eventually moved out of Eugene. This was not an isolated case and Norton has been losing ground to McAfee and other security software companies for years.

The company does have over $1 billion in net cash on its balance sheet, trades for 6 times EBITDA and there is a good chance the company might spin-off certain divisions to unlock value. Their Verisign acquisition was also a good addition and my recent interaction with Verisign to renew a SSL certificate was a positive one.

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

P/E: 10.71 Forward P/E: 9.44 Industry P/E: 15.75
P/S: 1.7 Price/Book: 2.29 EV/EBITDA: 6.01
Market Cap: $11.81B Avg. Daily Volume: 9,345,550 52 Week Range: $13.06 – $18.88

5. Teledyne Technologies Inc. (TDY): $64.23

Chairman, President & CEO Robert Mehrabian acquired 10,000 shares of this Aerospace products company, paying $60.95 per share for a total amount of $609,475. Mr. Mehrabian increased his stake by 5.55% to 190,107 shares with this purchase.

This is a sizable purchase and follows another 10,000 share purchase at an average price of $58.77 in March as you can see from this page. The company reported all-time record quarterly sales and earnings when it reported Q2 results last week. The company expects to earn between $3.98 and $4.04 per share for the full year 2012.

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

P/E: 16.39 Forward P/E: 14.8 Industry P/E: 14.14
P/S: 1.17 Price/Book: 2.06 EV/EBITDA: 9.22
Market Cap: $2.40B Avg. Daily Volume: 171,266 52 Week Range: $44.86 – $66.29

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $29.75

Founder Bill Gates sold 10 million shares of Microsoft for $29.41, generating $294.1 million from the sale.

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

P/E: 14.88 Forward P/E: 8.88 Industry P/E: 24.26
P/S: 3.32 Price/Book: 3.69 EV/EBITDA: 6.52
Market Cap: $249.41B Avg. Daily Volume: 44,195,200 52 Week Range: $23.79 – $32.95

2. Quality Systems Inc. (QSII): $17.06

Director Ahmed D. Hussein sold 3,509,641 shares of this healthcare information systems provider for $16.13, generating $56.6 million from the sale.

According to a letter from Quality Systems to its shareholders, these shares were sold as a result of margin calls and violate the company’s insider trading policy. Mr. Hussein is a dissident board member who wants to appoint his own group of nominees to Quality Systems’ board of directors.

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

P/E: 13.98 Forward P/E: 12.1 Industry P/E: 25.13
P/S: 2.18 Price/Book: 3.18 EV/EBITDA: 7.26
Market Cap: $1.01B Avg. Daily Volume: 1,005,730 52 Week Range: $15.04 – $50.7

3. Ventas, Inc. (VTR): $67.05

Chairman and CEO Debra A. Cafaro sold 264,264 shares of this healthcare REIT for $67.25, generating $17.8 million from the sale. 125,534 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 Ventas, Inc. here.

P/E: 42.49 Forward P/E: 17.06 Industry P/E: 37.77
P/S: 8.53 Price/Book: 2.11 EV/EBITDA: 19.88
Market Cap: $19.80B Avg. Daily Volume: 1,705,200 52 Week Range: $43.25 – $68.15

4. Westinghouse Air Brake Technologies Corporation (WAB): $78.38

Shares of this railroads components provider were sold by 5 insiders:

  • President & CEO Albert J. Neupaver sold 130,000 shares for $80.33, generating $10.4 million from the sale.
  • Senior VP, Human Resources Scott Wahlstrom sold 17,500 shares for $79.95, generating $1.4 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Michael W. Howell sold 3,000 shares for $80.20, generating $240,591 from the sale.
  • Director Brian Hehir sold 2,000 shares for $79.26, generating $158,511 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • VP,Senior Counsel/Asst. Secretary David M. Seitz sold 1,375 shares for $79.83, generating $109,771 from the sale.

You can view the list of recent insider transactions for Westinghouse Air Brake Technologies Corporation here.

P/E: 17.53 Forward P/E: 13.7 Industry P/E: N/A
P/S: 1.67 Price/Book: 3.32 EV/EBITDA: 9.5
Market Cap: $3.78B Avg. Daily Volume: 308,245 52 Week Range: $49.38 – $82.9

5. The Charles Schwab Corporation (SCHW): $12.8

Chairman Charles R. Schwab sold 813,000 shares of this brokerage and investment firm for $12.61, generating $10.2 million from the sale. These shares were sold indirectly through a Limited Partnership.

You can view the list of recent insider transactions for The Charles Schwab Corporation here.

P/E: 19.34 Forward P/E: 17.07 Industry P/E: 19.61
P/S: 3.26 Price/Book: 2.01 EV/EBITDA: N/A
Market Cap: $16.27B Avg. Daily Volume: 9,618,400 52 Week Range: $10.56 – $15.53

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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