Insider Trading 08 November 2013: Big Sales of Microsoft, Amazon, HCA Holdings

November 10th, 2013
in contributors

by Asif Suria

Insider buying more than doubled with insiders purchasing $266.66 million of their stock last week compared to $114.05 million in the week prior. Selling tripled with insiders selling $4.55 billion of stock last week compared to $1.51 billion in the week prior. The last time insiders sold so aggressively was towards the end of 2010 when insiders were expecting an increase in the capital gains tax rate the following year.

A majority of the insider buying last week was driven by a $202 million purchase of kidney dialysis centers operator DaVita HealthCare Partners (DVA) by a subsidiary of Berkshire Hathaway (BRK-A). A third of the insider selling was driven by sales of hospital operator HCA Holdings (HCA) by several private equity firms including Bain Capital and Kohlberg Kravis Roberts.

Follow up:


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 went up to 17.04.In other words, insiders sold more than 17 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 13.22.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 9, 2013

Insider Sell Buy Ratio November 9, 2013

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): $58.03

Director Mallika Srinivasan acquired 581,766 shares of this farm & construction machinery company, paying $57.70 per share for a total amount of $33.57 million. These shares were purchased indirectly by TAFE Motors and Tractors Limited.

You can view the list of recent insider transactions for AGCO Corporation here.

P/E: 10.25 Forward P/E: 9.64 Industry P/E: N/A
P/S: 0.53 Price/Book: 1.46 EV/EBITDA: 5.77
Market Cap: $5.65B Avg. Daily Volume: 1,069,400 52 Week Range: $42.48 – $64.6

2. Allied World Assurance Company Holdings, AG (AWH): $110.11

Director Eric S. Schwartz acquired 35,000 shares of this insurance company, paying $109.12 per share for a total amount of $3.82 million. These shares were purchased indirectly by Eric & Erica Schwartz Family LLC.

You can view the list of recent insider transactions for Allied World Assurance Company Holdings, AG here.

P/E: 16.29 Forward P/E: 14.43 Industry P/E: N/A
P/S: 1.74 Price/Book: 1.07 EV/EBITDA: -10.47
Market Cap: $3.72B Avg. Daily Volume: 167,249 52 Week Range: $76.12 – $110.2

3. Barracuda Networks, Inc. Common (CUDA): $21.23

Director James J. Goetz acquired 100,000 shares of this security and storage solutions provider, paying $21.45 per share for a total amount of $2.14 million.

Mr. Goetz is a partner at venture capital firm Sequoia Capital. Sequoia is an investor in Barracuda Networks and it was interesting to see one of its partners buy stock in the company with his personal funds on the day of Barracuda Networks’ IPO.

You can view the list of recent insider transactions for Barracuda Networks, Inc. Common here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: N/A EV/EBITDA: 131.88
Market Cap: $N/A Avg. Daily Volume: 2,752,830 52 Week Range: $18.84 – $23.77

4. Digital Realty Trust Inc. (DLR): $45.81

Shares of this technology infrastructure REIT were acquired by 2 insiders:

  • Director Laurence A. Chapman acquired 20,000 shares, paying $46.94 per share for a total amount of $938,900. Mr. Chapman increased his stake by 36.37% to 74,994 shares with this purchase.
  • SVP & General Counsel Joshua A. Mills acquired 5,200 shares, paying $48.19 per share for a total amount of $250,603.

You can view the list of recent insider transactions for Digital Realty Trust Inc. here.

P/E: 21.25 Forward P/E: 9.29 Industry P/E: N/A
P/S: 3.8 Price/Book: 2.03 EV/EBITDA: 12.12
Market Cap: $5.88B Avg. Daily Volume: 1,686,830 52 Week Range: $45.22 – $74

5. Endurance Specialty Holdings Ltd. (ENH): $56.6

Chaorman & Chief Executive Officer John Charman acquired 16,400 preferred shares of this property & casualty insurance company, paying $25.63 per share for a total amount of $420,250 and 3,500 regular shares, paying $55.73 per share for a total amount of $195,067. These shares were purchased indirectly by various trusts.

Voluntary Disclosure: I have a long position in Endurance Specialty Holdings.

You can view the list of recent insider transactions for Endurance Specialty Holdings Ltd. here.

P/E: 13.69 Forward P/E: 11.77 Industry P/E: N/A
P/S: 1.09 Price/Book: 0.91 EV/EBITDA: 7.97
Market Cap: $2.51B Avg. Daily Volume: 193,205 52 Week Range: $37.56 – $57.39

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $37.78

Shares of Microsoft were sold by 3 insiders:

  • Founder Bill Gates sold 10,641,900 shares for $35.54, generating $378.22 million from the sale.
  • Executive Vice President Bradford L. Smith sold 200,000 shares for $37.97, generating $7.59 million from the sale.
  • EVP, Marketing Tami Reller sold 5,800 shares for $35.67, generating $206,886 from the sale.

You can view the list of recent insider transactions for Microsoft Corporation here.

P/E: 14.14 Forward P/E: 12.94 Industry P/E: N/A
P/S: 3.9 Price/Book: 3.83 EV/EBITDA: 8.03
Market Cap: $315.39B Avg. Daily Volume: 51,223,100 52 Week Range: $26.26 – $38.22

2. Amazon.com Inc. (AMZN): $350.31

Shares of Amazon were sold by 6 insiders:

  • Chairman, CEO and President Jeffrey P. Bezos sold 1,000,000 shares for $358.14, generating $358.14 million from the sale.
  • Senior Vice President Jeffrey A. Wilke sold 13,626 shares for $359.13, generating $4.89 million from the sale. 6,126 of these shares were sold indirectly through a trust.
  • Senior Vice President Jeffrey M. Blackburn sold 11,985 shares for $365.53, generating $4.38 million from the sale.
  • Senior Vice President and CFO Thomas J. Szkutak sold 10,000 shares for $361.48, generating $3.61 million from the sale.
  • Senior Vice President Brian H. Valentine sold 8,309 shares for $361.07, generating $3 million from the sale.
  • Director Tom A. Alberg sold 4,103 shares for $365.51, generating $1.49 million from the sale.

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

P/E: 1 Forward P/E: 131.2 Industry P/E: N/A
P/S: 2.24 Price/Book: 17.32 EV/EBITDA: 50.32
Market Cap: $160.35B Avg. Daily Volume: 2,570,890 52 Week Range: $218.18 – $368.4

3. Proto Labs, Inc. (PRLB): $83.65

President and CEO Bradley A. Cleveland sold 227,814 shares of this molded plastic parts producer for $83.70, generating $19.07 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Proto Labs, Inc. here.

P/E: 64.35 Forward P/E: 46.99 Industry P/E: N/A
P/S: 13.13 Price/Book: 10.15 EV/EBITDA: 37.45
Market Cap: $2.12B Avg. Daily Volume: 384,305 52 Week Range: $31.02 – $88.63

4. ServiceNow, Inc. (NOW): $51.86

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

  • Chief Product Officer Frederic B. Luddy sold 247,000 shares for $54.03, generating $13.34 million from the sale. 97,000 of these shares were sold indirectly through various trusts.
  • President & CEO Frank Slootman sold 40,000 shares for $53.71, generating $2.15 million 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 ServiceNow, Inc. here.

P/E: N/A Forward P/E: 370.43 Industry P/E: N/A
P/S: 19 Price/Book: 24.76 EV/EBITDA: -217.49
Market Cap: $7.13B Avg. Daily Volume: 1,556,820 52 Week Range: $25.54 – $58.41

5. Illinois Tool Works Inc. (ITW): $79.08

Director Robert C. McCormack sold 158,583 shares of this diversified machinery company for $79.08, generating $12.54 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Illinois Tool Works Inc. here.

P/E: 16 Forward P/E: 17.73 Industry P/E: N/A
P/S: 2.03 Price/Book: 3.34 EV/EBITDA: 11.08
Market Cap: $35.26B Avg. Daily Volume: 1,633,950 52 Week Range: $58.39 – $79.68

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















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