March 4th, 2013
by Asif Suria
Insider buying picked up with insiders purchasing $25.02 million of their stock last week compared to $14.89 million in the week prior. Selling decreased with insiders selling $1.64 billion of stock last week compared to $3.46 billion in the week prior. As mentioned in our previous article, several large sales last week were related to secondary offerings by professional investors.
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 down to 65.7. In other words, insiders sold almost 66 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 232.51.
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. Digital Generation, Inc. (DGIT): $7.76
Shares of this digital advertising services company were acquired by 3 insiders:
- Executive Chairman Scott K. Ginsburg acquired 270,620 shares paying $7.61 per share for a total amount of $2.06 million. Mr. Ginsburg increased his stake by 13.07% to 2,340,774 shares with this purchase.
- President and CEO Neil Nguyen acquired 20,500 shares paying $7.50 per share for a total amount of $153,750. Mr. Nguyen increased his stake by 397% to 25,665 shares with this purchase.
- EVP- Global Sales & Operations Andy Ellenthal acquired 6,250 shares paying $7.51 per share for a total amount of $46,938. Mr. Ellenthal increased his stake by 32% to 25,994 shares with this purchase.
The company lost nearly a third of its value last month, dropping from $8.98 to $6.45, after announcing that it could not find a buyer despite reaching out to 45 potential acquirers. The company also reported Q4 2012 revenue dropped 4% to $103.6 million from $108.3 million. While annual revenue increased 19% to $386.6 million, the company reported a fourth quarter and full year loss. Most of the $238.8 million 2012 loss was related to a $219.6 million goodwill write-off. Adjusted EBITDA for 2012 decreased 7% to $125.7 million compared to $134.6 million for 2011.
|P/E: N/A||Forward P/E: 14.11||Industry P/E: 26.29|
|P/S: 0.55||Price/Book: 0.74||EV/EBITDA: 5.39|
|Market Cap: $214.44M||Avg. Daily Volume: 710,487||52 Week Range: $6.4 – $13.2|
2. Opko Health, Inc. (OPK): $6.99
CEO & Chairman Phillip Frost M.D. acquired 272,500 shares of this medical devices and drug development company, paying $7.03 per share for a total amount of $1.92 million. These shares were purchased indirectly by Frost Gamma Investments Trust
|P/E: N/A||Forward P/E: N/A||Industry P/E: 22.06|
|P/S: 56.58||Price/Book: 14.05||EV/EBITDA: -83.18|
|Market Cap: $2.08B||Avg. Daily Volume: 2,400,860||52 Week Range: $4 – $7.35|
3. ABIOMED, Inc. (ABMD): $15.99
Director Henri A. Termeer acquired 100,000 shares of this medical devices company, paying $14.98 per share for a total amount of $1.5 million.
|P/E: 48.9||Forward P/E: 34.76||Industry P/E: 22.06|
|P/S: 4||Price/Book: 4.46||EV/EBITDA: 29.33|
|Market Cap: $605.32M||Avg. Daily Volume: 867,731||52 Week Range: $11.8 – $26.17|
4. Murphy Oil Corporation (MUR): $60.4
Director Claiborne P. Deming acquired 20,000 shares of this oil & gas exploration & production company, paying $60.86 per share for a total amount of $1.22 million. These shares were purchased indirectly by trusts.
|P/E: 12.12||Forward P/E: 9.56||Industry P/E: 12.3|
|P/S: 0.41||Price/Book: 1.31||EV/EBITDA: 3.77|
|Market Cap: $11.68B||Avg. Daily Volume: 1,814,770||52 Week Range: $43.29 – $64.91|
5. Mondelez International, Inc. (MDLZ): $27.81
Director Fredric G. Reynolds acquired 38,000 shares of this packaged food products company (formerly Kraft Foods), paying $26.90 per share for a total amount of $1.02 million.
|P/E: 16.44||Forward P/E: 15.8||Industry P/E: N/A|
|P/S: 1.41||Price/Book: 1.52||EV/EBITDA: 12.02|
|Market Cap: $49.53B||Avg. Daily Volume: 12,743,500||52 Week Range: $24.5 – $42.54|
You can view the full list of insider purchases here.
Notable Insider Sales:
1. Willis Group Holdings Public Limited Company (WSH): $38.01
Director Joseph J. Plumeri sold 1,185,973 shares of this insurance company for $36.85, generating $43.71 million from the sale.
|P/E: N/A||Forward P/E: 12.8||Industry P/E: 20.45|
|P/S: 1.9||Price/Book: 3.88||EV/EBITDA: 20.1|
|Market Cap: $6.58B||Avg. Daily Volume: 807,388||52 Week Range: $31.98 – $38.14|
2. Express Scripts Holding Company (ESRX): $57.36
President, Chariman & CEO George Paz sold 281,193 shares of this pharmacy benefit management (PBM) services provider for $57.24, generating $16.1 million from the sale.
|P/E: 32.72||Forward P/E: 11.66||Industry P/E: 13.67|
|P/S: 0.5||Price/Book: 1.99||EV/EBITDA: 11.09|
|Market Cap: $46.95B||Avg. Daily Volume: 5,728,470||52 Week Range: $49.79 – $66.06|
3. JB Hunt Transport Services Inc. (JBHT): $69.18
Director Earl Wayne Garrison sold 124,760 shares of this trucking company for $69.84, generating $8.71 million from the sale.
|P/E: 26.71||Forward P/E: 19.6||Industry P/E: 16.5|
|P/S: 1.62||Price/Book: 10.34||EV/EBITDA: 11.7|
|Market Cap: $8.13B||Avg. Daily Volume: 761,390||52 Week Range: $49.98 – $70.55|
4. Philip Morris International, Inc. (PM): $91.44
Shares of this tobacco products company were sold by two insiders:
- Chairman & CEO Louis C. Camilleri sold 55,000 shares for $93.15, generating $5.12 million from the sale.
- Chief Operating Officer Andre Calantzopoulos sold 30,000 shares for $93.15, generating $2.79 million from the sale.
|P/E: 17.69||Forward P/E: 14.27||Industry P/E: 17.75|
|P/S: 4.82||Price/Book: N/A||EV/EBITDA: 11.54|
|Market Cap: $150.67B||Avg. Daily Volume: 5,116,230||52 Week Range: $81.1 – $94.13|
5. International Business Machines Corporation (IBM): $202.91
Shares of IBM were sold by four insiders:
- Senior Vice President Timothy S. Shaughnessy sold 12,000 shares for $202.12, generating $2.43 million from the sale.
- Senior Vice President Bridget A. van Kralingen sold 12,000 shares for $200, generating $2.4 million from the sale.
- Senior Vice President Colleen F. Arnold sold 9,730 shares for $203, generating $1.98 million from the sale.
- Senior Vice President James P. Bramante sold 4,500 shares for $200.51, generating $902,295 from the sale.
|P/E: 14.12||Forward P/E: 11||Industry P/E: 13.98|
|P/S: 2.15||Price/Book: 11.93||EV/EBITDA: 9.51|
|Market Cap: $227.26B||Avg. Daily Volume: 3,842,770||52 Week Range: $181.85 – $211.79|
You can view the full list of insider sales here.