November 19th, 2012
by Asif Suria
Insider buying increased with insiders purchasing $155.86 million of their stock last week compared to $90.63 million in the week prior. Selling decreased slightly with insiders selling $1.24 billion of stock last week compared to $1.29 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 7.94.
In other words, insiders sold almost 8 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 14.23. 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. AGCO Corporation (AGCO): $43.21
Director Mallika Srinivasan acquired 1,054,530 shares of this farm & construction machinery company, paying $43.87 per share for a total amount of $46.26 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: 6.04||Forward P/E: 7.77||Industry P/E: 9.39|
|P/S: 0.43||Price/Book: 1.25||EV/EBITDA: 5.43|
|Market Cap: $4.19B||Avg. Daily Volume: 1,112,060||52 Week Range: $38.09 – $54|
2. MEMC Electronic Materials Inc. (WFR): $2.26
Director Steven Vincent Tesoriere acquired 3,238,000 shares of this semiconductor and solar company, paying $2.27 per share for a total amount of $7.36 million. These shares were purchased indirectly by Altai Capital Management, L.P.
I decided to dig into MEMC Electronics after this purchase and while the company appears to have stemmed losses last quarter, the net profit they posted last quarter was driven by one-time contract termination and restructuring benefits. Q3 revenue inched up 3% in the semiconductor division but dropped 33% in the solar division on a sequential quarter basis. On a year-over-year basis, revenue was down double digits in both divisions. Based on their projections, it looks like the company will post operating losses in the fourth quarter. This is a turnaround story that still has a lot of turning around to do.
You can view the list of recent insider transactions for MEMC Electronic Materials Inc. here.
|P/E: N/A||Forward P/E: 10.76||Industry P/E: 18.43|
|P/S: 0.2||Price/Book: 0.91||EV/EBITDA: 21.35|
|Market Cap: $521.94M||Avg. Daily Volume: 4,435,980||52 Week Range: $1.44 – $5.95|
3. NuStar GP Holdings, LLC (NSH): $25.29
Shares of this oil storage and pipeline company were acquired by 2 insiders:
- Director William E. Greehey acquired 206,000 shares, paying $25.87 per share for a total amount of $5.33 million. Mr. Greehey increased his stake by 2.73% to 7,759,177 shares with this purchase.
- EVP, CFO & Treasurer Steven A. Blank acquired 2,000 shares, paying $24.80 per share for a total amount of $49,600. Mr. Blank increased his stake by 4.26% to 48,961 shares with this purchase.
You can view the list of recent insider transactions for NuStar GP Holdings, LLC here.
|P/E: 67.08||Forward P/E: 15.71||Industry P/E: 24|
|P/S: 1||Price/Book: 2.47||EV/EBITDA: N/A|
|Market Cap: $1.08B||Avg. Daily Volume: 105,587||52 Week Range: $24.06 – $36.75|
4. First Financial Bankshares Inc. (FFIN): $35.3597
Chairman, President and CEO Scott F. Dueser acquired 132,977 shares of this regional bank, paying $35.32 per share for a total amount of $4.69 million. These shares were purchased indirectly through a partnership.
You can view the list of recent insider transactions for First Financial Bankshares Inc. here.
|P/E: 15.18||Forward P/E: 14.61||Industry P/E: 12.18|
|P/S: 5.37||Price/Book: 2||EV/EBITDA: N/A|
|Market Cap: $1.10B||Avg. Daily Volume: 67,438||52 Week Range: $29.16 – $37.75|
5. Strayer Education Inc. (STRA): $48.65
Shares of this for-profit education company were acquired by 2 insiders:
- Director David J. Wargo acquired 60,000 shares, paying $45.91 per share for a total amount of $2.75 million. Mr. Wargo increased his stake by 2016.13% to 62,976 shares with this purchase.
- Director Robert R. Grusky acquired 1,400 shares, paying $47.61 per share for a total amount of $66,654. These shares were purchased indirectly by Halley Dog Investments, LLC.
You can view the list of recent insider transactions for Strayer Education Inc. here.
|P/E: 7.37||Forward P/E: 9.61||Industry P/E: 17.44|
|P/S: 0.95||Price/Book: 8.42||EV/EBITDA: 3.99|
|Market Cap: $556.41M||Avg. Daily Volume: 236,363||52 Week Range: $42.98 – $120|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. JDA Software Group Inc. (JDAS): $44.6
Shares of this software company were sold by 3 insiders:
- Director James D. Armstrong sold 344,409 shares for $44.78, generating $15.42 million from the sale.
- President; CEO Hamish Brewer sold 267,028 shares for $44.80, generating $11.96 million from the sale. 115,000 of these shares were sold as a result of exercising options immediately prior to the sale.
- EVP, CFO Peter S. Hathaway sold 97,915 shares for $44.60, generating $4.37 million from the sale.
You can view the list of recent insider transactions for JDA Software Group Inc. here.
|P/E: 64.45||Forward P/E: 18.28||Industry P/E: 20.4|
|P/S: 2.92||Price/Book: 2.63||EV/EBITDA: 10.63|
|Market Cap: $1.92B||Avg. Daily Volume: 932,132||52 Week Range: $23.95 – $45|
2. Crown Holdings Inc. (CCK): $36.34
Chairman, President and CEO John W. Conway sold 535,000 shares of this packaging company for $37.14, generating $19.87 million from the sale. These shares were sold for estate and tax planning purposes.
You can view the list of recent insider transactions for Crown Holdings Inc. here.
|P/E: 10.18||Forward P/E: 10.98||Industry P/E: 10.41|
|P/S: 0.62||Price/Book: N/A||EV/EBITDA: 8.35|
|Market Cap: $5.24B||Avg. Daily Volume: 867,289||52 Week Range: $29.92 – $39.05|
3. Cabela’s Incorporated (CAB): $45.02
Shares of this sporting goods retailer were sold by 3 insiders:
- Vice Chairman James W. Cabela sold 431,884 shares for $40.55, generating $17.51 million from the sale. These shares were transferred to a trust and not sold in the open market.
- Executive Vice President Joseph M. Friebe sold 38,733 shares for $45.38, generating $1.76 million from the sale.
- Chairman Richard N. Cabela sold 5,000 shares for $44.37, generating $221,850 from the sale. These shares were sold indirectly by Mr. Cabela’s spouse.
You can view the list of recent insider transactions for Cabela’s Incorporated here.
|P/E: 18.38||Forward P/E: 14.62||Industry P/E: 22.04|
|P/S: 1.04||Price/Book: 2.38||EV/EBITDA: 14.13|
|Market Cap: $3.15B||Avg. Daily Volume: 760,576||52 Week Range: $21.51 – $56.78|
4. Apple Inc. (AAPL): $527.678
Senior Vice President Daniel J. Riccio sold 20,226 shares of Apple for $529.69, generating $10.71 million from the sale.
You can view the list of recent insider transactions for Apple Inc. here.
|P/E: 11.95||Forward P/E: 9.05||Industry P/E: 11.95|
|P/S: 3.16||Price/Book: 4.18||EV/EBITDA: 7.98|
|Market Cap: $496.38B||Avg. Daily Volume: 19,500,100||52 Week Range: $363.32 – $705.07|
5. Seagate Technology Public Limited Company (STX): $27.11
Shares of this data storage company were sold by 3 insiders:
- Chairman, President and CEO Stephen J. Luczo sold 250,152 shares for $29.40, generating $7.35 million from the sale. These shares were sold indirectly through a trust.
- EVP,General Counsel, CAO Kenneth M. Massaroni sold 10,000 shares for $26.71, generating $267,100 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
- Director Gregorio Reyes sold 3,750 shares for $29.60, generating $110,992 from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for Seagate Technology Public Limited Company here.
|P/E: 3.57||Forward P/E: 4.94||Industry P/E: 17.5|
|P/S: 0.64||Price/Book: 2.98||EV/EBITDA: 2.46|
|Market Cap: $10.23B||Avg. Daily Volume: 9,413,840||52 Week Range: $15 – $35.71|
You can view the full list of sales from this Insider Sales page.
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.