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Insider Trading 23 November 2012: Big Jump in Insider Selling

November 25th, 2012
in contributors

by Asif Suria

Insider buying decreased with insiders purchasing $60.9 million of their stock last week compared to $155.86 million in the week prior. Selling increased with insiders selling $2.04 billion of stock last week compared to $1.24 billion in the week prior. The big jump in insider selling was driving by secondary offerings by shareholders of industrial products company MRC Global (MRC) and IT services provider ServiceNow (NOW).

While insider buying dropped, there were a number of interesting purchases of beaten down stocks that did not make the top 5 insider purchases list. As mentioned in one my tweets, some of these stocks that saw insider buying include Constant Contact (CTCT), STEC (STEC), Glu Mobile (GLUU), Audience (ADNC), Molycorp (MCP), MEMC Electronic Materials (WFR) and Strayer Education (STRA).

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 jumped to 33.54. In other words, insiders sold more than 33 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 7.94.

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 November 23, 2012

Insider Sell Buy Ratio November 23, 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. AGCO Corporation (AGCO): $45.61

Director Mallika Srinivasan acquired 350,734 shares of this farm & construction machinery company, paying $44.61 per share for a total amount of $15.65 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: 6.38 Forward P/E: 8.2 Industry P/E: 9.65
P/S: 0.44 Price/Book: 1.29 EV/EBITDA: 5.67
Market Cap: $4.42B Avg. Daily Volume: 1,103,400 52 Week Range: $38.09 – $54

2. Kansas City Southern (KSU): $77.61

Director Henry R. Davis acquired 67,300 shares of this railroads company, paying $73.92 per share for a total amount of $4.97 million. Mr. Davis increased his stake by 64.23% to 172,084 shares with this purchase.

You can view the list of recent insider transactions for Kansas City Southern here.

P/E: 22.43 Forward P/E: 18.93 Industry P/E: 14.21
P/S: 3.82 Price/Book: 2.79 EV/EBITDA: 11.82
Market Cap: $8.54B Avg. Daily Volume: 876,026 52 Week Range: $61.22 – $83.98

3. Cheniere Energy Partners LP. (CQP): $21.13

Chairman & CEO Charif Souki acquired 117,000 shares of this oil & gas pipelines company, paying $18.36 per share for a total amount of $2.15 million. These shares were purchased indirectly by Mr. Souki’s wife.

You can view the list of recent insider transactions for Cheniere Energy Partners LP. here.

P/E: N/A Forward P/E: N/A Industry P/E: 23.51
P/S: 21.34 Price/Book: 6.28 EV/EBITDA: 63.54
Market Cap: $5.81B Avg. Daily Volume: 425,910 52 Week Range: $15.75 – $27.47

4. J. C. Penney Company, Inc. (JCP): $17.29

Director Javier G. Teruel acquired 126,000 shares of this department stores chain, paying $15.98 per share for a total amount of $2.01 million. Mr. Teruel increased his stake by 393.59% to 158,013 shares with this purchase.

You can view the list of recent insider transactions for J. C. Penney Company, Inc. here.

P/E: N/A Forward P/E: 101.71 Industry P/E: 18.45
P/S: 0.26 Price/Book: 1.08 EV/EBITDA: 18.22
Market Cap: $3.79B Avg. Daily Volume: 8,904,680 52 Week Range: $15.69 – $43.18

5. Corning Inc. (GLW): $11.29

Director Gordon Gund acquired 170,000 shares of this diversified electronics company, paying $10.76 per share for a total amount of $1.83 million. These shares were purchased indirectly through a trust.

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

P/E: 8.97 Forward P/E: 8.68 Industry P/E: 13.85
P/S: 2.12 Price/Book: 0.75 EV/EBITDA: 5.76
Market Cap: $16.68B Avg. Daily Volume: 13,881,700 52 Week Range: $10.62 – $15.04

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

Notable Insider Sales:

1. Fidelity National Financial, Inc. (FNF): $23.66

Shares of this insurance company were sold by 3 insiders:

  • Director William P. Foley II sold 884,118 shares for $22.71, generating $20.08 million from the sale. 350,000 of these shares were sold indirectly by Folco Development Corporation.
  • EVP, Chief Legal Officer Peter T. Sadowski sold 150,000 shares for $22.37, generating $3.36 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Director Daniel D. Lane sold 10,050 shares for $22.92, generating $230,347 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 Fidelity National Financial, Inc. here.

P/E: 8.42 Forward P/E: 13.22 Industry P/E: 22.77
P/S: 0.83 Price/Book: 1.26 EV/EBITDA: 6.3
Market Cap: $5.24B Avg. Daily Volume: 2,558,380 52 Week Range: $15 – $23.75

2. Medidata Solutions, Inc. (MDSO): $41.82

Shares of this software-as-a-service company were sold by 2 insiders:

  • President Glen de Vries sold 204,000 shares for $40.01, generating $8.16 million from the sale.
  • Chairman & CEO Tarek Sherif sold 204,000 shares for $40.01, generating $8.16 million from the sale.

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

P/E: 34.88 Forward P/E: 35.74 Industry P/E: 35.3
P/S: 5.1 Price/Book: 8.19 EV/EBITDA: 26.29
Market Cap: $1.04B Avg. Daily Volume: 167,156 52 Week Range: $18.14 – $43.79

3. CBRE Group, Inc (CBG): $17.87

Shares of this commercial real estate services company were sold by 2 insiders:

  • Chief Executive Officer Brett W. White sold 864,599 shares for $17.82, generating $15.41 million from the sale. 194,246 of these shares were sold as a result of exercising options immediately prior to the sale.
  • EVP, General Counsel Laurence H. Midler sold 24,269 shares for $17.75, generating $430,862 from the sale.

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

P/E: 26.05 Forward P/E: 12.86 Industry P/E: 15.49
P/S: 0.91 Price/Book: 4.25 EV/EBITDA: 10.77
Market Cap: $5.76B Avg. Daily Volume: 3,341,470 52 Week Range: $14.18 – $21.16

4. EOG Resources, Inc. (EOG): $118.99

Shares of this independent oil & gas company were sold by 2 insiders:

  • Chairman & CEO Mark G. Papa sold 100,000 shares for $115.30, generating $11.53 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Chief Operating Officer Gary L. Thomas sold 27,409 shares for $115.52, generating $3.17 million from the sale. 26 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 EOG Resources, Inc. here.

P/E: 26.85 Forward P/E: 19.07 Industry P/E: 19.25
P/S: 3 Price/Book: 2.32 EV/EBITDA: 6.77
Market Cap: $32.23B Avg. Daily Volume: 1,749,300 52 Week Range: $82.48 – $124.49

5. Intuit Inc. (INTU): $59.16

Shares of this accounting and tax software company were sold by 3 insiders:

  • Chairman of Exec. Committee Scott D. Cook sold 200,000 shares for $58.80, generating $11.76 million from the sale. These shares were sold indirectly through trusts.
  • EVP, Small Business Group Kiran M. Patel sold 40,000 shares for $58.89, generating $2.36 million from the sale. 25,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • SVP, General Counsel & Corporate Secretary Laura A. Fennell sold 10,000 shares for $58.98, generating $589,812 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 Intuit Inc. here.

P/E: 21.46 Forward P/E: 15.86 Industry P/E: 23.69
P/S: 4.1 Price/Book: 6.31 EV/EBITDA: 12.32
Market Cap: $17.51B Avg. Daily Volume: 1,847,200 52 Week Range: $50.36 – $62.33

You can view the full list of sales from this Insider Sales page.

Voluntary Disclosure: I hold long positions in Corning (GLW), Glu Mobile (GLUU) and Audience (ADNC).

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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