September 2nd, 2012
by Asif Suria
Insider buying decreased with insiders purchasing $30.22 million of their stock last week compared to $155.77 million in the week prior. Selling also decreased with insiders selling $673.36 million worth of stock last week compared to $1.52 billion 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 22.3. In other words, insiders sold more than 22 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 9.77.
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.
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. Forest Laboratories Inc. (FRX): $34.69
10% owner Carl C. Icahn acquired 331,406 shares of this pharmaceutical company, paying $34.65 per share for a total amount of $11.48 million.
We normally do not include purchases by 10% owners who are not part of the management team or on the board of directors. However in this case, while Mr. Icahn is listed as a 10% owner, he had attempted to get four nominees on Forest Laboratories’ board in August and managed to get one of his nominees elected. Following these set of purchases, Mr. Icahn now owns 11.37% of the company. In response, the company adopted a shareholders rights plan or “poison pill” that would be triggered if a person or group acquired more than 12% of the company’s stock.
The company trades for just 6 times EBITDA and has a very strong balance sheet with nearly $2.5 billion in net cash. The company, mostly known for its depression and Alzheimers’ drugs, recently received FDA approval for a drug that treats irritable bowel syndrome and chronic constipation.
You can view the list of recent insider transactions for Forest Laboratories Inc. here.
|P/E: 12.04||Forward P/E: 22.53||Industry P/E: 12.43|
|P/S: 2.2||Price/Book: 1.64||EV/EBITDA: 6.22|
|Market Cap: $9.22B||Avg. Daily Volume: 1,939,930||52 Week Range: $28.47 – $36.44|
2. Federal-Mogul Corp. (FDML): $9.36
Director Carl C. Icahn acquired 239,149 shares of this auto parts manufacturer, paying $9.41 per share for a total amount of $2.25 million. These shares were purchased indirectly by Icahn Enterprises Holdings L.P.
Mr. Icahn was buying shares of Federal-Mogul last year at prices ranging from $13.46 to $17.43 and commenced buying shares again about a month ago. You can find a list of all his insider transactions here.
You can view the list of recent insider transactions for Federal-Mogul Corp. here.
|P/E: N/A||Forward P/E: 5.2||Industry P/E: 8.93|
|P/S: 0.13||Price/Book: 0.99||EV/EBITDA: 5.2|
|Market Cap: $925.74M||Avg. Daily Volume: 179,838||52 Week Range: $8.67 – $19.28|
3. Zipcar, Inc. (ZIP): $7.9
Director Stephen M. Case acquired 255,311 shares of this car sharing and hourly car rental company, paying $7.75 per share for a total amount of $1.98 million. These shares were purchased indirectly through a trust.
As we have reported several times this month, Mr. Case has been actively buying shares of Zipcar. Following this purchase, he has picked up a total of 1 million shares at an average price of $7.83 million. Given these purchases, we are going to make Zipcar the subject of our next weekly focus article, which will be published a day late on Tuesday on account of the labor day holiday on Monday.
You can view the list of recent insider transactions for Zipcar, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 22.3|
|P/S: N/A||Price/Book: N/A||EV/EBITDA: N/A|
|Market Cap: $N/A||Avg. Daily Volume: N/A||52 Week Range: $6.5 – $21.6|
4. Axis Capital Holdings Limited (AXS): $34.07
CEO, AXIS Re John Drake Nichols acquired 30,000 shares of this insurance company, paying $33.60 per share for a total amount of $1 million. Mr. Nichols increased his stake by 60% to 80,000 shares with this purchase.
You can view the list of recent insider transactions for Axis Capital Holdings Limited here.
|P/E: 7.7||Forward P/E: 9.04||Industry P/E: 12.12|
|P/S: 1.12||Price/Book: 0.79||EV/EBITDA: 7.86|
|Market Cap: $4.34B||Avg. Daily Volume: 755,058||52 Week Range: $24.8 – $35.12|
5. Home Loan Servicing Solutions, Ltd. (HLSS): $15.65
Director William C. Erbey acquired 51,000 shares of this mortgage servicing company, paying $15.71 per share for a total amount of $801,269. Mr. Erbey increased his stake by 17.51% to 342,245 shares with this purchase.
You can view the list of recent insider transactions for Home Loan Servicing Solutions, Ltd. here.
|P/E: 12.59||Forward P/E: 11.86||Industry P/E: 10.07|
|P/S: 26.95||Price/Book: 1.24||EV/EBITDA: N/A|
|Market Cap: $222.18M||Avg. Daily Volume: 216,940||52 Week Range: $12.8 – $16.44|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Estee Lauder (EL): $59.95
Shares of this personal care products company were sold by 3 insiders:
- Chairman, Clinique Labs, LLC Ronald S. Lauder sold 701,460 shares for $59.96, generating $42.1 million from the sale.
- Director Irvine O. Hockaday Jr. sold 9,910 shares for $59.57, generating $590,336 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Executive Chairman William P. Lauder sold 1,102 shares for $60.08, generating $66,208 from the sale.
You can view the list of recent insider transactions for The Est here.
|P/E: 27.75||Forward P/E: 20.39||Industry P/E: 18.95|
|P/S: 2.38||Price/Book: 8.51||EV/EBITDA: 13.7|
|Market Cap: $23.21B||Avg. Daily Volume: 2,342,940||52 Week Range: $40.755 – $65.6|
2. Campbell Soup Co. (CPB): $35.14
Director Charlotte C. Weber sold 400,000 shares of this Campbell Soup for $35.14, generating $14.1 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for Campbell Soup Co. here.
|P/E: 15.21||Forward P/E: 13.94||Industry P/E: 19.48|
|P/S: 1.44||Price/Book: 8.72||EV/EBITDA: 8.93|
|Market Cap: $11.10B||Avg. Daily Volume: 2,070,510||52 Week Range: $29.93 – $35.6|
3. Garmin Ltd. (GRMN): $40.35
Chief Executive Officer Min H. Kao sold 300,000 shares of this GPS manufacturer for $40.44, generating $12.1 million from the sale. These shares were sold indirectly by Mr. Kao’s children.
You can view the list of recent insider transactions for Garmin Ltd. here.
|P/E: 13.41||Forward P/E: 14.01||Industry P/E: 18.58|
|P/S: 2.73||Price/Book: 2.43||EV/EBITDA: 8.68|
|Market Cap: $7.86B||Avg. Daily Volume: 1,111,620||52 Week Range: $30.34 – $50.67|
4. Rent-A-Center, Inc. (RCII): $35.28
Chairman of the Board & CEO Mark E. Speese sold 200,000 shares of this rental services provider for $36.01, generating $7.2 million from the sale.
You can view the list of recent insider transactions for Rent-A-Center, Inc. here.
|P/E: 11.96||Forward P/E: 9.94||Industry P/E: 11.05|
|P/S: 0.69||Price/Book: 1.45||EV/EBITDA: 6.72|
|Market Cap: $2.08B||Avg. Daily Volume: 375,005||52 Week Range: $24.94 – $39.5|
5. Verisk Analytics, Inc. (VRSK): $48.52
Shares of this business services provider were sold by 3 insiders:
- Director John F. Lehman sold 96,100 shares for $48.01, generating $4.6 million from the sale.
- SVP – AISG Vincent Cialdella sold 15,000 shares for $48.45, generating $726,750 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director David B. Wright sold 7,500 shares for $48.16, generating $361,200 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 Verisk Analytics, Inc. here.
|P/E: 27.85||Forward P/E: 21.56||Industry P/E: 22.18|
|P/S: 5.64||Price/Book: 170.25||EV/EBITDA: 14.74|
|Market Cap: $8.05B||Avg. Daily Volume: 769,614||52 Week Range: $32.54 – $51|
You can view the full list of sales from this Insider Sales page.
Other posts by Asif Suria
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.