January 13th, 2013
by Asif Suria
Insider buying increased with insiders purchasing $83 million of their stock last week compared to $45.83 million in the week prior. Selling decreased with insiders selling $220.36 million of stock last week compared to $655.73 million 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 2.65. In other words, insiders sold almost 3 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 14.31. This the lowest ratio we have seen in over 7 months. Before interpreting this as a wildly bullish signal, it is worth keeping in mind that we are just coming off several weeks of insider sales related to taking advantage of lower capital gains rates in 2012. We are also at the start of a new quarter when company insiders hold off on transactions until earnings are released.
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. Opko Health, Inc. (OPK): $5.38
CEO & Chairman Phillip Frost M.D. acquired 136,000 shares of this medical devices and drug development company, paying $5.22 per share for a total amount of $709,596. 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: 21.95|
|P/S: 43.29||Price/Book: 10.75||EV/EBITDA: -63.46|
|Market Cap: $1.60B||Avg. Daily Volume: 1,395,580||52 Week Range: $4 – $5.53|
2. Cardiovascular Systems Inc. (CSII): $14.59
Director Glen D. Nelson acquired 33,000 shares of this medical device company, paying $11.96 per share for a total amount of $394,621. Mr. Nelson increased his stake by 8.38% to 426,692 shares with this purchase. These are old transactions from November that were reported late.
You can view the list of recent insider transactions for Cardiovascular Systems Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 21.95|
|P/S: 3.45||Price/Book: 10.31||EV/EBITDA: -18.25|
|Market Cap: $302.16M||Avg. Daily Volume: 82,349||52 Week Range: $8.24 – $14.92|
3. Exa Corporation (EXA): $9.67
Shares of this software and services provider to vehicle manufacturers were acquired by 2 insiders:
- Director John William Poduska Sr. acquired 20,000 shares, paying $9.73 per share for a total amount of $194,691.
- VP of Finance and Chief Accounting Officer Stephen P. Sarno acquired 10,000 shares, paying $9.34 per share for a total amount of $93,417.
Exa is an interesting microcap that has been on my radar since the company went public last June at $10/share, below an earlier range of $11-$13. With locations in Burlington, Massachusetts and Silicon Valley, the company builds simulation software solutions that allows car manufacturers to design more efficient vehicles by increasing aerodynamic efficiency and reducing vehicle weight.
For the full fiscal year 2013 ending in January 2013, the company expects revenue of $49.3 million, net income of $1 million and adjusted EBITDA of $5.85 million (mid-point of provided range). Revenue grew 9% last quarter (13% on a constant currency basis). The company had $29.6 million of net cash on the balance sheet at the end of last quarter. While the company is selling for 2 times expected fiscal 2013 sales after deducting cash, it appears to be expensive on an EV/EBITDA basis. The company is worth keeping on your radar should it scale enough to improve the bottom line.
You can view the list of recent insider transactions for Exa Corporation here.
|P/E: 8.63||Forward P/E: 40.29||Industry P/E: 25.95|
|P/S: 2.61||Price/Book: 3.67||EV/EBITDA: 23.89|
|Market Cap: $127.98M||Avg. Daily Volume: 48,312||52 Week Range: $8.69 – $13.4|
4. Thomas Properties Group Inc. (TPGI): $5.28
Chairman, President & CEO James A. Thomas acquired 43,400 shares of this property management company, paying $5.28 per share for a total amount of $228,991. These shares were purchased indirectly by a partnership controlled by Mr. Thomas.
You can view the list of recent insider transactions for Thomas Properties Group Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 14.91|
|P/S: 2.47||Price/Book: 1.29||EV/EBITDA: 13.3|
|Market Cap: $243.48M||Avg. Daily Volume: 53,597||52 Week Range: $3.15 – $6.15|
5. Insmed Incorporated (INSM): $6.7
President and CEO William Lewis acquired 10,770 shares of this biotech company, paying $6.90 per share for a total amount of $74,313. Mr. Lewis increased his stake by 79.38% to 24,338 shares with this purchase.
You can view the list of recent insider transactions for Insmed Incorporated here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 22|
|P/S: 154.86||Price/Book: 1.58||EV/EBITDA: -3.84|
|Market Cap: $210.06M||Avg. Daily Volume: 198,264||52 Week Range: $2.66 – $8.27|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Facebook, Inc. (FB): $31.72
Shares of Facebook were sold by 3 insiders:
- VP, General Counsel & Secretary Theodore Warren Ullyot sold 51,270 shares for $28.74, generating $1.47 million from the sale.
- VP Engineering Michael Todd Schroepfer sold 39,285 shares for $28.94, generating $1.14 million from the sale.
- VP Marketing & Business Part. David B. Fischer sold 24,000 shares for $29.58, generating $709,958 from the sale.
You can view the list of recent insider transactions for Facebook, Inc. here.
|P/E: 164.35||Forward P/E: 48.8||Industry P/E: 25.06|
|P/S: 14.63||Price/Book: 4.75||EV/EBITDA: 54.28|
|Market Cap: $68.72B||Avg. Daily Volume: 67,619,600||52 Week Range: $17.55 – $45|
2. Alexion Pharmaceuticals, Inc. (ALXN): $100.39
CEO Leonard Bell sold 27,197 shares of this biotech company for $99.96, generating $2.72 million from the sale.
You can view the list of recent insider transactions for Alexion Pharmaceuticals, Inc. here.
|P/E: 88.84||Forward P/E: 35.98||Industry P/E: 22|
|P/S: 19.14||Price/Book: 10.64||EV/EBITDA: 48.77|
|Market Cap: $19.50B||Avg. Daily Volume: 1,434,160||52 Week Range: $73.04 – $119.54|
3. Sempra Energy (SRE): $71.83
Shares of this gas utility were sold by 2 insiders:
- Chairman and CEO Debra L. Reed sold 21,350 shares for $71.11, generating $1.52 million from the sale.
- Senior VP Joyce G. Rowland sold 12,252 shares for $71.15, generating $871,730 from the sale.
You can view the list of recent insider transactions for Sempra Energy here.
|P/E: 19.95||Forward P/E: 16.67||Industry P/E: 17.93|
|P/S: 1.81||Price/Book: 1.72||EV/EBITDA: 10.6|
|Market Cap: $17.36B||Avg. Daily Volume: 1,043,610||52 Week Range: $55.12 – $72.87|
4. Generac Holdings Inc. (GNRC): $35.28
Chief Operating Officer Dawn Tabat sold 54,395 shares of this power products (generators) company for $34.61, generating $1,882,732 from the sale. 12,605 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 Generac Holdings Inc. here.
|P/E: 7.32||Forward P/E: 11.92||Industry P/E: 15.69|
|P/S: 2.14||Price/Book: 5.43||EV/EBITDA: 12.48|
|Market Cap: $2.40B||Avg. Daily Volume: 918,275||52 Week Range: $18.35 – $39.18|
5. Copart, Inc. (CPRT): $31.67
Chief Executive Officer Jayson A. Adair sold 57,520 shares of this online auctions and vehicle remarketing services provider for $30.40, generating $1.75 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for Copart, Inc. here.
|P/E: 21.98||Forward P/E: 17.4||Industry P/E: 15.09|
|P/S: 4.13||Price/Book: 6.34||EV/EBITDA: 12.34|
|Market Cap: $3.95B||Avg. Daily Volume: 539,116||52 Week Range: $22.58 – $31.8|
You can view the full list of sales from this Insider Sales page.