Insider Trading 18 April 2014: Wells Fargo, JP Morgan Selling

April 21st, 2014
in contributors

by Asif Suria

Welcome to edition 200 of Insider Weekends. Insider buying more than doubled last week with insiders purchasing $99.75 million of their stock compared to $41.55 million in the week prior. Just two transactions accounted for half of the total insider buying as discussed below. Selling declined with insiders selling $432.02 million of stock last week compared to $530.53 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 down to 4.33. In other words, insiders sold more than 4 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 12.77.

Follow up:

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 April 18, 2014

Insider Sell Buy Ratio April 18, 2014

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. Navistar International Corporation (NAV): $34

We normally don’t report on transactions by 10% owners but decided to make an exception in this case. 10% Owner Carl C. Icahn acquired 1,027,789 shares of this truck and diesel engine manufacturer, paying $33.28 per share for a total amount of $34.21 million.

Last week, director Mark Rachesky acquired 911,774 shares of this truck and diesel engine manufacturer, paying $33.13 per share for a total amount of $30.21 million.

Both Icahn and Rachesky are adding to their positions just like they did last July and September. You can read a profile of Rachesky in the article titled Meet Mark Rachesky: The Protege Who Stabbed Icahn In The Back.

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

P/E: N/A Forward P/E: 18.18 Industry P/E: 118.13
P/S: 0.27 Price/Book: N/A EV/EBITDA: -11.91
Market Cap: $2.76B Avg. Daily Volume: 1,371,060 52 Week Range: $25.56 – $41.57

2. Sears Holdings Corporation (SHLD): $38.33

Director Thomas J. Tisch acquired 475,000 shares of this department stores chain, paying $33.56 per share for a total amount of $15,940,000. Mr. Tisch increased his stake by 325.74% to 620,824 shares with this purchase.

This purchase was treated with a lot of enthusiasm with investors bidding the stock up 14% in a single day on more than twice daily volume. With the stock trading close to a 52 week low and with nearly 60% of the float short, it remains to be seen if this purchase triggers a short squeeze or the gains fade away next week.

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

P/E: N/A Forward P/E: N/A Industry P/E: 10.34
P/S: 0.1 Price/Book: 2.05 EV/EBITDA: -13.62
Market Cap: $4.08B Avg. Daily Volume: 1,582,410 52 Week Range: $31.26 – $67.5

3. Sears Hometown and Outlet Stores, Inc. (SHOS): $22.34

10% Owner Edward Lampert acquired 173,574 shares of this retail chain, paying $20.62 per share for a total amount of $3.58 million.

Once again we made an exception by reporting a purchase by a 10% owner to highlight this dual purchases of Sears related companies following the Land’s End spin-off.

You can view the list of recent insider transactions for Sears Hometown and Outlet Stores, Inc. here.

P/E: 14.44 Forward P/E: N/A Industry P/E: 10.34
P/S: 0.2 Price/Book: 0.82 EV/EBITDA: 7.8
Market Cap: $508.21M Avg. Daily Volume: 164,976 52 Week Range: $19.75 – $57.44

4. Opko Health, Inc. (OPK): $8.14

Shares of this medical devices and drug development company were acquired by 2 insiders:

  • CEO & Chairman Phillip Frost M.D. acquired 303,800 shares, paying $8.35 per share for a total amount of $2.54 million. These shares were purchased indirectly by Frost Gamma Investments Trust.
  • Vice Chairman & CTO Jane Hsiao acquired 10,000 shares, paying $8.03 per share for a total amount of $80,300. Mr. Hsiao increased his stake by 0.05% to 21,338,212 shares with this purchase.

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: N/A
P/S: 35.63 Price/Book: 3.92 EV/EBITDA: -64.46
Market Cap: $3.36B Avg. Daily Volume: 3,117,280 52 Week Range: $6.14 – $12.95

5. Esterline Technologies Corp. (ESL): $107.5

Director Henry Ward Winship IV acquired 8,778 shares of this aerospace and defense products company, paying $103.36 per share for a total amount of $907,277. These shares were purchased indirectly by Relational Investors.

The stock is trading close to its 52-week high but still trades at what appears to be a reasonable valuation of 10 times EBITDA for a company that is growing its top line at 10% and generating 12.5% in operating margins.

You can view the list of recent insider transactions for Esterline Technologies Corp. here.

P/E: 20.25 Forward P/E: 16.49 Industry P/E: 20.32
P/S: 1.68 Price/Book: 1.79 EV/EBITDA: 10.26
Market Cap: $3.42B Avg. Daily Volume: 224,900 52 Week Range: $69.16 – $113.06

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

Notable Insider Sales:

1. Barnes & Noble, Inc. (BKS): $16.37

Chairman of the Board Leonard Riggio sold 3,700,000 shares of this bookseller for $17.30, generating $64 million from the sale. This was a privately negotiated block trade for tax planning purposes.

You can view the list of recent insider transactions for Barnes & Noble, Inc. here.

P/E: N/A Forward P/E: N/A Industry P/E: 19.15
P/S: 0.18 Price/Book: 1.59 EV/EBITDA: 5.62
Market Cap: $978.45M Avg. Daily Volume: 1,984,830 52 Week Range: $12.59 – $23.71

2. JPMorgan Chase & Co. (JPM): $55.22

Shares of JP Morgan were sold by 6 insiders:

  • Managing Director Daniel E. Pinto sold 98,910 shares for $54.92, generating $5.43 million from the sale.
  • Chief Operating Officer Matthew E. Zames sold 97,581 shares for $54.91, generating $5.36 million from the sale.
  • Executive Vice President Gordon Smith sold 71,952 shares for $54.91, generating $3.95 million from the sale.
  • General Counsel Stephen M. Cutler sold 43,997 shares for $54.91, generating $2.42 million from the sale.
  • Managing Director Douglas B. Petno sold 21,110 shares for $54.91, generating $1.16 million from the sale.
  • Chief Risk Officer Ashley Bacon sold 3,050 shares for $54.90, generating $167,454 from the sale.

You can view the list of recent insider transactions for JPMorgan Chase & Co. here.

P/E: 13.68 Forward P/E: 8.99 Industry P/E: 13.15
P/S: 2.23 Price/Book: 1.02 EV/EBITDA: N/A
Market Cap: $209.13B Avg. Daily Volume: 20,164,200 52 Week Range: $46.7 – $61.48

3. Wells Fargo & Company (WFC): $48.93

Shares of this bank were sold by 3 insiders:

  • Senior Executive Vice President David M. Carroll sold 71,800 shares for $48.54, generating $3.49 million from the sale.
  • Senior Executive Vice President Avid Modjtabai sold 55,000 shares for $48.60, generating $2.67 million from the sale. These shares were sold indirectly through a trust.
  • Senior Executive Vice President Kevin A. Rhein sold 50,000 shares for $48.67, generating $2.43 million from the sale.

You can view the list of recent insider transactions for Wells Fargo & Company here.

P/E: 12.17 Forward P/E: 11.41 Industry P/E: 13.15
P/S: 3.16 Price/Book: 1.61 EV/EBITDA: N/A
Market Cap: $257.65B Avg. Daily Volume: 17,627,700 52 Week Range: $36.19 – $50.49

4. G-III Apparel Group, Ltd. (GIII): $72.79

Chief Executive Officer Morris Goldfarb sold 71,050 shares of this apparel manufacturer for $72.39, generating $5.14 million from the sale.

You can view the list of recent insider transactions for G-III Apparel Group, Ltd. here.

P/E: 19.62 Forward P/E: 14.89 Industry P/E: 47.45
P/S: 0.89 Price/Book: 2.92 EV/EBITDA: 10.53
Market Cap: $1.49B Avg. Daily Volume: 280,353 52 Week Range: $36.81 – $77.22

5. Signet Jewelers Limited (SIG): $100.45

Shares of this specialty jewelry retailer (parent of Kay Jewelers, Jared The Galleria Of Jewelry, H.Samuel, and Ernest Jones) were sold by 3 insiders:

  • Chief Executive Officer Michael W. Barnes sold 49,195 shares for $101.26, generating $4.98 million from the sale.
  • UK Chief Admin.Officer Michael Povall sold 703 shares for $101.67, generating $71,474 from the sale.
  • Commerical Director Sebastian Hobbs sold 295 shares for $101.67, generating $29,993 from the sale.

You can view the list of recent insider transactions for Signet Jewelers Limited here.

P/E: 22.03 Forward P/E: 17.47 Industry P/E: 20.81
P/S: 1.93 Price/Book: 3.17 EV/EBITDA: 15.57
Market Cap: $8.06B Avg. Daily Volume: 1,023,830 52 Week Range: $64.95 – $107.74

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

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria










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