November 18th, 2013
by Asif Suria
Insider buying decreased with insiders purchasing $190.82 million of their stock last week compared to $266.66 million in the week prior. Selling also declined with insiders selling $3.56 billion of stock last week compared to $4.55 billion in the week prior.
We decided to highlight six insider purchases this week instead of the usual five because three out of the top 6 purchases were by insiders of mortgage REITs or companies that invest in mortgages. Expectations of the fed scaling back on its $85 billion per month quantitative easing program has roiled stocks of mortgage REITs and other interest rate sensitive instruments, leading them to heavily underperform the market.
For example, Annaly Capital (NLY) is down over 25% this year while AG Mortgage (MITT) is down nearly 32%. With the S&P 500 up 28.46% this year, the relative underperformance of these mortgage REITs is well over 50%.
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 18.67.In other words, insiders sold almost 19 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 17.04.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 15, 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:
Beyond the top 6 insider purchases mentioned below, other insiders purchases that were notable this week include a cluster purchase by multiple insiders of textbook rental company Chegg (CHGG) that went public last week at $12.50 per share and promptly dropped 27%. Two insiders of office REIT American Realty Capital Properties (ARCP) including the CEO and the President decided to buy shares on the open market. While it is not a mortgage REIT, ARCP yields 7.2%, which is more than twice the 3.38% average yield of office REITs in October according to NAREIT.
1. AGCO Corporation (AGCO): $58.22
Director Mallika Srinivasan acquired 490,373 shares of this farm & construction machinery company, paying $57.33 per share for a total amount of $28,114,540. 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: 10.28||Forward P/E: 9.72||Industry P/E: 14.09|
|P/S: 0.53||Price/Book: 1.48||EV/EBITDA: 5.74|
|Market Cap: $5.67B||Avg. Daily Volume: 1,073,470||52 Week Range: $43.64 – $64.6|
2. Ellington Financial LLC (EFC): $23.34
Co-Chief Investment Officer Michael W. Vranos acquired 500,000 shares of this mortgage investment company, paying $23.27 per share for a total amount of $11.64 million. Mr. Vranos increased his stake by 3497.97% to 514,294 shares with this purchase.
You can view the list of recent insider transactions for Ellington Financial LLC here.
|P/E: 6||Forward P/E: 7.7||Industry P/E: 10.06|
|P/S: 9.02||Price/Book: 0.97||EV/EBITDA: N/A|
|Market Cap: $608.22M||Avg. Daily Volume: 105,108||52 Week Range: $21.12 – $26.99|
3. Omega Healthcare Investors Inc. (OHI): $32.01
Director Bernard J. Korman acquired 46,070 shares of this healthcare REIT, paying $31.15 per share for a total amount of $1.44 million. Mr. Korman increased his stake by 8.68% to 576,526 shares with this purchase.
You can view the list of recent insider transactions for Omega Healthcare Investors Inc. here.
|P/E: 23.03||Forward P/E: 11.86||Industry P/E: N/A|
|P/S: 9.59||Price/Book: 3.25||EV/EBITDA: 15.19|
|Market Cap: $3.83B||Avg. Daily Volume: 1,102,590||52 Week Range: $21.93 – $38.41|
4. Murphy Oil Corporation (MUR): $62.83
Director Claiborne P. Deming acquired 20,000 shares of this oil exploration & production company, paying $62.07 per share for a total amount of $1.24 million. These shares were purchased indirectly through trusts.
You can view the list of recent insider transactions for Murphy Oil Corporation here.
|P/E: 9.97||Forward P/E: 9.64||Industry P/E: N/A|
|P/S: 0.4||Price/Book: 1.3||EV/EBITDA: 3.71|
|Market Cap: $11.75B||Avg. Daily Volume: 1,581,450||52 Week Range: $47.79 – $63.23|
5. AG Mortgage Investment Trust, Inc. (MITT): $16.23
Chief Executive Officer David N. Roberts acquired 72,697 shares of this mortgage REIT, paying $15.53 per share for a total amount of $1.13 million. Mr. Roberts increased his stake by 58.38% to 197,216 shares with this purchase.
You can view the list of recent insider transactions for AG Mortgage Investment Trust, Inc. here.
|P/E: 28.98||Forward P/E: N/A||Industry P/E: 105.92|
|P/S: 9.41||Price/Book: 0.82||EV/EBITDA: N/A|
|Market Cap: $460.53M||Avg. Daily Volume: 336,835||52 Week Range: $15.31 – $26.94|
6. Annaly Capital Management, Inc. (NLY): $10.73
Chairman of Board & CEO Wellington Denahan acquired 93,000 shares of this mortgage REIT, paying $10.68 per share for a total amount of $993,240. Mr. Denahan increased his stake by 7.78% to 1,288,081 shares with this purchase.
You can view the list of recent insider transactions for Annaly Capital Management, Inc. here.
|P/E: 3.08||Forward P/E: 9.33||Industry P/E: 105.92|
|P/S: 2.62||Price/Book: 0.83||EV/EBITDA: N/A|
|Market Cap: $10.16B||Avg. Daily Volume: 13,784,900||52 Week Range: $10.3 – $16.18|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Facebook, Inc. (FB): $49.01
Shares of Facebook were sold by 2 insiders:
- Chief Financial Officer David A. Ebersman sold 923,400 shares for $46.76, generating $43.17 million from the sale.
- VP, General Counsel & Secretary Colin Stretch sold 2,977 shares for $46.00, generating $136,942 from the sale.
You can view the list of recent insider transactions for Facebook, Inc. here.
|P/E: 125.35||Forward P/E: 43.76||Industry P/E: 50.42|
|P/S: 17.5||Price/Book: 9.16||EV/EBITDA: 32.06|
|Market Cap: $120.31B||Avg. Daily Volume: 78,706,400||52 Week Range: $22.67 – $54.83|
2. Actavis plc (ACT): $165.27
Shares of this pharmacuetical company were sold by 6 insiders:
- Director John A. King sold 157,931 shares for $155.92, generating $24.62 million from the sale. 152,000 of these shares were sold indirectly by Pandalena Limited.
- Chairman,President & CEO Paul Bisaro sold 40,921 shares for $158.73, generating $6.49 million from the sale.
- Chief Legal Officer-Global & Secretary David A. Buchen sold 30,000 shares for $159.30, generating $4.78 million from the sale.
- President -Actavis Pharma Sigurdur O. Olafsson sold 25,000 shares for $159.87, generating $3.99 million from the sale.
- President – Global Operations Robert A. Stewart sold 12,000 shares for $158.39, generating $1.9 million from the sale.
- President Anda, Inc. Albert Paonessa III sold 6,500 shares for $158.75, generating $1.03 million from the sale.
You can view the list of recent insider transactions for Actavis plc here.
|P/E: N/A||Forward P/E: 12.88||Industry P/E: N/A|
|P/S: 3.72||Price/Book: 5.83||EV/EBITDA: 19.58|
|Market Cap: $28.76B||Avg. Daily Volume: 1,461,000||52 Week Range: $82.02 – $165.47|
3. PriceSmart Inc. (PSMT): $115.45
Shares of this discount warehouse grocer were sold by 2 insiders:
- Director Robert E. Price sold 174,472 shares for $116.02, generating $20.24 million from the sale. These shares were sold indirectly through a trust.
- EVP & Chief Operating Officer William J. Naylon sold 2,000 shares for $121.22, generating $242,440 from the sale.
You can view the list of recent insider transactions for PriceSmart Inc. here.
|P/E: 41.53||Forward P/E: 32.07||Industry P/E: N/A|
|P/S: 1.49||Price/Book: 7.12||EV/EBITDA: 23.68|
|Market Cap: $3.49B||Avg. Daily Volume: 114,411||52 Week Range: $70.02 – $124.67|
4. Intrepid Potash, Inc. (IPI): $16.35
Director Hugh E. Harvey sold 1,000,000 shares of this agricultural chemicals company for $16.12, generating $16.12 million from the sale.
You can view the list of recent insider transactions for Intrepid Potash, Inc. here.
|P/E: 29.2||Forward P/E: 62.88||Industry P/E: 22.48|
|P/S: 3.56||Price/Book: 1.25||EV/EBITDA: 10.07|
|Market Cap: $1.23B||Avg. Daily Volume: 1,469,100||52 Week Range: $10.6 – $24.05|
5. CBS Corporation (CBS): $60.55
Shares of this media company were sold by 3 insiders:
- President and CEO Leslie Moonves sold 233,810 shares for $60.47, generating $14.14 million. These shares were sold indirectly through a trust.
- Chief Operating Officer Joseph Ianniello sold 25,253 shares for $58.88, generating $1.49 million.These shares were sold as a result of exercising options immediately prior to the sale.
- Director David R Andelman sold 5,093 shares for $58.79, generating $299,417. 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 CBS Corporation here.
|P/E: 21.23||Forward P/E: N/A||Industry P/E: 21.1|
|P/S: 2.42||Price/Book: 3.78||EV/EBITDA: 11.54|
|Market Cap: $36.34B||Avg. Daily Volume: 4,148,890||52 Week Range: $34.05 – $61.08|
You can view the full list of sales from this Insider Sales page.
Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria