November 4th, 2012
by Asif Suria
Insider buying decreased with insiders purchasing $121.62 million of their stock last week compared to $159 million in the week prior. Selling decreased with insiders selling $1.58 billion of stock last week compared to $1.7 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 13.04. In other words, insiders sold 13 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 10.86.
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. Kinder Morgan, Inc. (KMI): $34.11
Director Fayez Sarofim acquired 600,000 shares of this oil and gas pipeline company, paying $34.76 per share for a total amount of $20.9 million. Mr. Sarofim increased his stake by 2.81% to 21,989,655 shares with this purchase. The shares purchased by Mr. Sarofim are class P shares.
Mr. Sarofim is an Egyptian-born Texas billionaire and manager of several Dreyfus funds. He is also the second largest direct investor of Kinder Morgan. While Mr. Sarofim has purchased shares of Kinder Morgan in managed client accounts in the past, this is a direct purchase.
The company completed its IPO in February 2011 and this Morningstar article titled “Three Ways to Invest in Kinder Morgan” does a great job of explaining the differences between the three incarnations of Kinder Morgan.
You can view the list of recent insider transactions for Kinder Morgan, Inc. here.
|P/E: N/A||Forward P/E: 25.08||Industry P/E: 24.71|
|P/S: 3.92||Price/Book: 2.54||EV/EBITDA: 20.15|
|Market Cap: $35.37B||Avg. Daily Volume: 5,773,490||52 Week Range: $26.91 – $40.25|
2. AGCO Corporation (AGCO): $45.78
Director Mallika Srinivasan acquired 415,664 shares of this farm & construction machinery company, paying $45.66 per share for a total amount of $18.98 million. These shares were purchased indirectly by Tractors and Farm Equipment Limited.
You can view the list of recent insider transactions for AGCO Corporation here.
|P/E: 6.4||Forward P/E: 8.22||Industry P/E: 10.16|
|P/S: 0.47||Price/Book: 1.36||EV/EBITDA: 5.69|
|Market Cap: $4.44B||Avg. Daily Volume: 1,093,180||52 Week Range: $38.09 – $54|
3. BlackRock, Inc. (BLK): $189.52
Director James Grosfeld acquired 42,400 shares of this asset management company, paying $189.10 per share for a total amount of $8 million. Mr. Grosfeld increased his stake by 8.84% to 521,938 shares with this purchase. 25,000 of these shares were purchased indirectly by a LLC.
This follows the $85.4 million purchase we highlighted last week.
You can view the list of recent insider transactions for BlackRock, Inc. here.
|P/E: 14.69||Forward P/E: 12.65||Industry P/E: 14.73|
|P/S: 3.62||Price/Book: 1.33||EV/EBITDA: 10|
|Market Cap: $32.60B||Avg. Daily Volume: 668,183||52 Week Range: $150.35 – $209.37|
4. Cracker Barrel Old Country Store, Inc. (CBRL): $63.45
10% Owner Sardar Biglari acquired 58,541 shares of this restaurant chain, paying $63.39 per share for a total amount of $3.7 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: 14.42||Forward P/E: 11.58||Industry P/E: 19.74|
|P/S: 0.58||Price/Book: 3.92||EV/EBITDA: 7.39|
|Market Cap: $1.49B||Avg. Daily Volume: 185,730||52 Week Range: $43.53 – $69.3|
5. Opko Health, Inc. (OPK): $4.26
CEO & Chairman Phillip Frost M.D. acquired 225,000 shares of this medical devices and drug development company, paying $4.30 per share for a total amount of $968,554. 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: 21.82|
|P/S: 40.77||Price/Book: 8.42||EV/EBITDA: -52.17|
|Market Cap: $1.27B||Avg. Daily Volume: 957,790||52 Week Range: $4.00 – $5.85|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Microsoft Corporation (MSFT): $29.4998
Shares of Microsoft were sold by 3 insiders:
- Founder Bill Gates sold 5,500,000 shares for $27.95, generating $153.7 million from the sale.
- Senior Vice President Lisa E. Brummel sold 71,313 shares for $28.54, generating $2 million from the sale.
- President, Offfice Division Kurt D. DelBene sold 35,000 shares for $28.00, generating $979,832 from the sale.
You can view the list of recent insider transactions for Microsoft Corporation here.
|P/E: 15.95||Forward P/E: 9.1||Industry P/E: 22.39|
|P/S: 3.43||Price/Book: 3.61||EV/EBITDA: 6.76|
|Market Cap: $248.28B||Avg. Daily Volume: 43,304,700||52 Week Range: $24.3 – $32.95|
2. M&T Bank Corporation (MTB): $103.55
Chairman of the Board and CEO Robert G. Wilmers sold 300,000 shares of this regional bank for $104.22, generating $31.3 million from the sale.
You can view the list of recent insider transactions for M&T Bank Corporation here.
|P/E: 16.14||Forward P/E: 12.69||Industry P/E: 13.76|
|P/S: 3.57||Price/Book: 1.47||EV/EBITDA: N/A|
|Market Cap: $13.20B||Avg. Daily Volume: 925,194||52 Week Range: $67.23 – $105.33|
3. The Charles Schwab Corporation (SCHW): $13.74
Chairman Charles R. Schwab sold 1,250,000 shares of this investment brokerage for $13.50, generating $16.9 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for The Charles Schwab Corporation here.
|P/E: 20.63||Forward P/E: 18.82||Industry P/E: 14.64|
|P/S: 3.63||Price/Book: 2.11||EV/EBITDA: N/A|
|Market Cap: $17.51B||Avg. Daily Volume: 9,519,980||52 Week Range: $10.67 – $15.53|
4. Alexion Pharmaceuticals, Inc. (ALXN): $89.09
Shares of this biopharmaceutical company were sold by 2 insiders:
- SVP & President ALXN Pharma Int’l Patrice Coissac sold 84,764 shares for $91.16, generating $7.7 million from the sale.
- CEO Leonard Bell sold 7,982 shares for $94.99, generating $758,237 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 Alexion Pharmaceuticals, Inc. here.
|P/E: 78.84||Forward P/E: 32.28||Industry P/E: 20.73|
|P/S: 17.24||Price/Book: 9.59||EV/EBITDA: 43.07|
|Market Cap: $17.31B||Avg. Daily Volume: 1,183,190||52 Week Range: $62.02 – $119.54|
5. Potlatch Corporation (PCH): $38.35
Shares of this industrial REIT were sold by 2 insiders:
- Chairman, President & CEO Michael J. Covey sold 80,000 shares for $38.43, generating $3.1 million from the sale.
- Executive Vice President Eric J. Cremers sold 30,000 shares for $38.35, generating $1.2 million from the sale. 2,500 of these shares were sold indirectly by Mr. Cremer’s wife.
You can view the list of recent insider transactions for Potlatch Corporation here.
|P/E: 56.73||Forward P/E: 30.2||Industry P/E: 48.86|
|P/S: 3.18||Price/Book: 11.18||EV/EBITDA: 21.38|
|Market Cap: $1.55B||Avg. Daily Volume: 193,198||52 Week Range: $28.02 – $38.9|
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.