December 6th, 2012
by Asif Suria
We were not able to publish this post over the weekend as we usually do but I decided to publish it today for the sake of continuity and because a couple of people asked about it. Insider buying dropped nearly in half with insiders purchasing $31.13 million of their stock last week compared to $60.9 million in the week prior. Selling also decreased with insiders selling $1.94 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 jumped to 62.4. In other words, insiders sold more than 62 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 33.54.
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): $46.15
Director Mallika Srinivasan acquired 251,383 shares of this farm & construction machinery company, paying $45.47 per share for a total amount of $11.43 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: 6.45||Forward P/E: 8.3||Industry P/E: 10.71|
|P/S: 0.46||Price/Book: 1.35||EV/EBITDA: 5.72|
|Market Cap: $4.48B||Avg. Daily Volume: 1,128,210||52 Week Range: $38.09 – $54|
2. Herbalife Ltd. (HLF): $45.97
Chief Operating Officer Richard Goudis acquired 45,516 shares of this nutritional supplement company, paying $43.89 per share for a total amount of $1.9 million. Mr. Goudis increased his stake by 33.81% to 180,136 shares with this purchase.
Herbalife’s stock has been under pressure since noted hedge fund manager David Einhorn asked a few questions on the first quarter conference call in May. Einhorn is also the author of the tome Fooling Some of the People All of the Time that chronicles his multi-year battle with Allied Capital after he started a short position in the company. The book is very informative despite some dry spells in the middle that could have used better editing.
You can view the list of recent insider transactions for Herbalife Ltd. here.
|P/E: 11.88||Forward P/E: 10.1||Industry P/E: 10.16|
|P/S: 1.25||Price/Book: 13.1||EV/EBITDA: 7.26|
|Market Cap: $4.96B||Avg. Daily Volume: 1,502,470||52 Week Range: $42.15 – $73|
3. NGL Energy Partners LP (NGL): $22.6
CEO & CFO Michael H. Krimbill acquired 50,000 shares of this propane and natural gas company, paying $23.27 per share for a total amount of $1.16 million.
You can view the list of recent insider transactions for NGL Energy Partners LP here.
|P/E: 166.18||Forward P/E: 31.39||Industry P/E: 12.28|
|P/S: 0.52||Price/Book: 1.35||EV/EBITDA: 25.26|
|Market Cap: $1.22B||Avg. Daily Volume: 16,964||52 Week Range: $19.55 – $27.61|
4. Citigroup, Inc. (C): $34.57
Chairman and Director Michael E. O’Neill acquired 28,200 shares of this investment bank, paying $35.52 per share for a total amount of $1 million. These shares were purchased indirectly through a trust.
Mr. O’Neill was credited for engineering the sudden and unexpected ouster of CEO Vikram Pandit from Citigroup in October.
You can view the list of recent insider transactions for Citigroup, Inc. here.
|P/E: 14.6||Forward P/E: 7.45||Industry P/E: 10.75|
|P/S: 1.76||Price/Book: 0.55||EV/EBITDA: N/A|
|Market Cap: $101.38B||Avg. Daily Volume: 39,712,700||52 Week Range: $24.4 – $38.72|
5. Opko Health, Inc. (OPK): $4.38
CEO & Chairman Phillip Frost M.D. acquired 215,000 shares of this medical devices and drug development company, paying $4.43 per share for a total amount of $952,976. 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: 20.98|
|P/S: 36.44||Price/Book: 9.05||EV/EBITDA: -51.51|
|Market Cap: $1.31B||Avg. Daily Volume: 1,167,490||52 Week Range: $4 – $5.53|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Airgas, Inc. (ARG): $88.57
Executive Chariman Peter McCausland sold 1,200,000 shares of this specialty gas company for $88.60, generating $106.32 million from the sale.
You can view the list of recent insider transactions for Airgas, Inc. here.
|P/E: 20.88||Forward P/E: 15.84||Industry P/E: 13.72|
|P/S: 1.41||Price/Book: 3.57||EV/EBITDA: 10.37|
|Market Cap: $6.92B||Avg. Daily Volume: 595,036||52 Week Range: $74.87 – $93.05|
2. Progressive Corp. (PGR): $21.25
Chairman of Board Peter B. Lewis sold 1,078,914 shares of this insurance company for $21.37, generating $23.06 million from the sale.
You can view the list of recent insider transactions for Progressive Corp. here.
|P/E: 14.35||Forward P/E: 14.76||Industry P/E: 10.64|
|P/S: 0.79||Price/Book: 1.99||EV/EBITDA: 7.95|
|Market Cap: $12.85B||Avg. Daily Volume: 6,078,060||52 Week Range: $17.81 – $23.41|
3. Apple Inc. (AAPL): $585.28
Senior Vice President Robert L. Mansfield sold 35,000 shares of Apple for $582.21, generating $20.38 million from the sale.
You can view the list of recent insider transactions for Apple Inc. here.
|P/E: 13.26||Forward P/E: 10.1||Industry P/E: 13.26|
|P/S: 3.54||Price/Book: 4.68||EV/EBITDA: 8.91|
|Market Cap: $550.57B||Avg. Daily Volume: 20,065,000||52 Week Range: $377.68 – $705.07|
4. JDA Software Group Inc. (JDAS): $44.66
Director James D. Armstrong sold 368,227 shares of this software company for $44.66, generating $16.45 million from the sale. 100,000 of these shares were sold indirectly through a Family LP.
You can view the list of recent insider transactions for JDA Software Group Inc. here.
|P/E: 64.54||Forward P/E: 18.3||Industry P/E: 23.12|
|P/S: 2.93||Price/Book: 2.63||EV/EBITDA: 10.64|
|Market Cap: $1.92B||Avg. Daily Volume: 1,031,150||52 Week Range: $23.95 – $45|
5. Microsoft Corporation (MSFT): $26.615
Director David F. Marquardt sold 500,000 shares of Microsoft for $27.13, generating $13.56 million from the sale.
You can view the list of recent insider transactions for Microsoft Corporation here.
|P/E: 14.39||Forward P/E: 8.24||Industry P/E: 23.16|
|P/S: 3.13||Price/Book: 3.3||EV/EBITDA: 5.92|
|Market Cap: $224.00B||Avg. Daily Volume: 54,246,100||52 Week Range: $25.29 – $32.95|
You can view the full list of sales from this Insider Sales page.