Insider Trading 26 October 2012: BlackRock Director Makes Large Purchase

October 29th, 2012
in contributors

by Asif Suria

Insider buying increased with insiders purchasing $159 million of their stock last week compared to $29.51 million in the week prior. Selling decreased with insiders selling $1.7 billion of stock last week compared to $2.04 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 dropped to 10.86. In other words, insiders sold almost 11 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 69.15.

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 October 26, 2012

Insider Sell Buy Ratio October 26, 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. BlackRock, Inc. (BLK): $186.99

Director James Grosfeld acquired 449,998 shares of this asset management company, paying $189.68 per share for a total amount of $85.4 million. Mr. Grosfeld increased his stake by 825.08% to 504,538 shares with this purchase. 85,000 of these shares were purchased indirectly by trusts and other entities.

We have written about BlackRock several times following purchases by Mr. Grosfeld but these are his largest purchases since we started tracking insider data in August 2010. We wrote the following about the company following one of his prior purchases in November 2010,

BlackRock is one of the largest investment management companies in the world with $3.45 trillion in assets under management as of September 2010. The company also owns the iShares brand of ETFs that it acquired from Barclays (BCS) in mid-2009. The commission free ETF trades offered by Fidelity for iShares ETF was soon followed by other brokerages and TD Ameritrade now offers 100 commission free trades on ETFs from multiple providers including iShares.

BlackRock showed up on my radar after a July purchase of 41,000 shares by $152.37. Clearly the increase in price since then did not stop Mr. Grosfeld from increasing his position. The company has a dividend yield of 2.3% and has a reputation for being one of the best asset management companies. With offices in 24 countries, unless we see a global decline across all asset classes, BlackRock appears to be on firm ground.

BlackRock is one of the largest investment management companies in the world with $3.45 trillion in assets under management as of September 2010. The company also owns the iShares brand of ETFs that it acquired from Barclays (BCS) in mid-2009. The commission free ETF trades offered by Fidelity for iShares ETF was soon followed by other brokerages and TD Ameritrade now offers 100 commission free trades on ETFs from multiple providers including iShares.BlackRock showed up on my radar after a July purchase of 41,000 shares by $152.37. Clearly the increase in price since then did not stop Mr. Grosfeld from increasing his position. The company has a dividend yield of 2.3% and has a reputation for being one of the best asset management companies. With offices in 24 countries, unless we see a global decline across all asset classes, BlackRock appears to be on firm ground.

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

P/E: 14.49 Forward P/E: 12.48 Industry P/E: 14.04
P/S: 3.57 Price/Book: 1.31 EV/EBITDA: 9.88
Market Cap: $32.17B Avg. Daily Volume: 651,491 52 Week Range: $149.84 – $209.37

2. Navistar International Corporation (NAV): $18.51

Shares of this truck and diesel engine manufacturer were purchased by two insiders:

  • Director Mark H. Rachesky acquired 1,598,000 shares, paying $18.75 per share for a total amount of $29.96 million.
  • 10% Owner Carl C Icahn acquired 1,594,667 shares, paying $18.75 per share for a total amount of $29.9 million.

Both Mr. Icahn and his former protege Mark Rachesky purchased shares of Navistar in July and followed up with these purchases this week. The stock is down nearly 58% over the last year and is now trading close to its 52 week low.

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

P/E: 94.44 Forward P/E: 1 Industry P/E: 27.79
P/S: 0.09 Price/Book: N/A EV/EBITDA: 19.44
Market Cap: $1.27B Avg. Daily Volume: 2,144,640 52 Week Range: $18.17 – $48.18

3. Cracker Barrel Old Country Store, Inc. (CBRL): $63.34

10% Owner Sardar Biglari sold 50,000 shares of this restaurant chain, paying $63.66 per share for a total amount of $3.2 million. These shares were purchased indirectly by Biglari Holdings.

You can view the list of recent insider transactions for Cracker Barrel Old Country Store, Inc. here.

P/E: 14.4 Forward P/E: 11.54 Industry P/E: 20.59
P/S: 0.58 Price/Book: 3.91 EV/EBITDA: 7.38
Market Cap: $1.49B Avg. Daily Volume: 184,245 52 Week Range: $41.08 – $69.3

4. Tuesday Morning Corporation (TUES): $5.97

Director Steven R. Becker acquired 540,075 shares of this home products retailer, paying $5.30 per share for a total amount of $2.9 million. These shares were purchased indirectly by Becker Drapkin Partners.

Becker Drapkin Partners is an activist fund that tends to focus on small cap companies. Some of their other purchases we have covered in the past include Hot Topic (HOTT) and Glu Mobile (GLUU).

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

P/E: 110.56 Forward P/E: 20.59 Industry P/E: 21.8
P/S: 0.29 Price/Book: 0.93 EV/EBITDA: 10.21
Market Cap: $249.33M Avg. Daily Volume: 206,408 52 Week Range: $3.05 – $6.86

5. Opko Health, Inc. (OPK): $4.34

CEO & Chairman Phillip Frost M.D. acquired 307,500 shares of this medical devices and drug development company, paying $4.51 per share for a total amount of $1.4 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: 21.38
P/S: 41.81 Price/Book: 8.64 EV/EBITDA: -54.32
Market Cap: $1.29B Avg. Daily Volume: 978,660 52 Week Range: $4 – $5.85

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

Notable Insider Sales:

1. Danaher Corp. (DHR): $51.77

Shares of this industrial products and equipment company were sold by 4 insiders:

  • Chairman Steven M. Rales sold 15,000,000 shares for $50.37, generating $755.5 million from the sale. According to the company, these shares were sold for estate planning purposes and the shares were repurchased by Danaher.
  • President and CEO H Lawrence Culp Jr. sold 1,123,724 shares for $52.97, generating $59.5 million from the sale. 856,596 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Senior VP-Finance & Tax James H. Ditkoff sold 20,300 shares for $53.50, generating $1.1 million from the sale.
  • SVP-Corporate Development Daniel Raskas sold 7,452 shares for $51.63, generating $384,747 from the sale.

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

P/E: 15.8 Forward P/E: 14.75 Industry P/E: 13.75
P/S: 2.01 Price/Book: 1.92 EV/EBITDA: 9.45
Market Cap: $35.86B Avg. Daily Volume: 3,369,630 52 Week Range: $44.39 – $57.15

2. Microsoft Corporation (MSFT): $28.21

Founder Bill Gates sold 14,500,000 shares of Microsoft for $28.04, generating $406.5 million from the sale.

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

P/E: 15.25 Forward P/E: 8.71 Industry P/E: 21.6
P/S: 3.24 Price/Book: 3.41 EV/EBITDA: 6.38
Market Cap: $237.43B Avg. Daily Volume: 41,716,200 52 Week Range: $24.3 – $32.95

3. Illinois Tool Works Inc. (ITW): $60.27

Shares of this diversified machinery company were sold by 2 insiders:

  • Director Robert C. McCormack sold 128,500 shares for $60.27, generating $7.7 million from the sale. These shares were sold indirectly through a trust.
  • Vice Chairman David C. Parry sold 15,000 shares for $60.40, generating $906,000 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 Illinois Tool Works Inc. here.

P/E: 12.34 Forward P/E: 13.54 Industry P/E: 13.75
P/S: 1.56 Price/Book: 2.74 EV/EBITDA: 8.83
Market Cap: $28.01B Avg. Daily Volume: 2,866,380 52 Week Range: $42.41 – $62.09

4. Cracker Barrel Old Country Store, Inc. (CBRL): $63.34

Director Michael A. Woodhouse sold 88,813 shares of this restaurant chain for $64.14, generating $5.7 million from the sale.

You can view the list of recent insider transactions for Cracker Barrel Old Country Store, Inc. here.

P/E: 14.4 Forward P/E: 11.54 Industry P/E: 20.59
P/S: 0.58 Price/Book: 3.91 EV/EBITDA: 7.38
Market Cap: $1.49B Avg. Daily Volume: 184,245 52 Week Range: $41.08 – $69.3

5. Capital One Financial Corp. (COF): $60

Shares of this credit services company were sold by 2 insiders:

  • Chief Human Resources Officer Jory A. Berson sold 42,915 shares for $60.00, generating $2.6 million from the sale. 25,046 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Information Officer Robert M. Alexander sold 20,000 shares for $61.26, generating $1.2 million from the sale. 12,000 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 Capital One Financial Corp. here.

P/E: 10.53 Forward P/E: 8.51 Industry P/E: 12.7
P/S: 2.3 Price/Book: 0.89 EV/EBITDA: N/A
Market Cap: $34.70B Avg. Daily Volume: 4,528,890 52 Week Range: $39.3 – $61.33

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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