Insider Trading 16 May 2014: ValueAct Buys $116 Million of Microsoft

May 18th, 2014
in contributors

by Asif Suria

Insiders went on a shopping spree last week with insider buying jumping to a six month high of $223.51 million compared to $65.72 million in the week prior. Selling edged up a wee bit with insiders selling $2.04 billion of stock last week compared to $2.03 billion 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 9.16. In other words, insiders sold more than 9 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 30.94.

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 May 16, 2014

Insider Sell Buy Ratio May 16, 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:

A large part of the insider buying was driven by a nearly 3 million share purchase of Microsoft (MSFT) by San Francisco based value oriented fund ValueAct for $116.71 million. Beyond this large purchase and the top 5 listed below, other purchases of note include the well respected Baker Brothers adding to their stake in biotech Seattle Genetics (SGEN) to the tune of $6.46 million, the CEO of CIT Group, John Thain, adding $1.66 million worth of stock to his stake, a cluster purchaseNYSE:KMI by insiders of mobile advertising company Millennial Media (MM) and a cluster purchase by insiders of natural consumer packaged foods company Boulder Brands (BDBD).

1. Scientific Games Corporation (SGMS): $9.5

Shares of this casino and lottery equipment provider were acquired by 4 insiders:

  • Director Ronald O. Perelman acquired 1,750,000 shares, paying $9.25 per share for a total amount of $16.19 million. These shares were acquired indirectly by MacAndrews & Forbes Holdings Inc.
  • President and CEO David L. Kennedy acquired 36,000 shares, paying $8.98 per share for a total amount of $323,280. Mr. Kennedy increased his stake by 32.28% to 147,534 shares with this purchase.
  • Executive VP & CFO Scott D. Schweinfurth acquired 20,000 shares, paying $9.09 per share for a total amount of $181,800.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 0.63 Price/Book: 2.8 EV/EBITDA: 13.41
Market Cap: $800.85M Avg. Daily Volume: 1,412,750 52 Week Range: $8.28 – $19.48

2. Kinder Morgan, Inc. (KMI): $33.45

Chairman and CEO Richard D. Kinder acquired 100,000 shares of this oil & gas pipelines company, paying $32.36 per share for a total amount of $3.24 million. Mr. Kinder increased his stake by 0.04% to 231,987,275 shares with this purchase.

You can view the list of recent insider transactions for Kinder Morgan, Inc. here.

P/E: 29.27 Forward P/E: 22.45 Industry P/E: N/A
P/S: 2.28 Price/Book: 2.69 EV/EBITDA: 11.61
Market Cap: $34.38B Avg. Daily Volume: 6,616,770 52 Week Range: $30.81 – $41.49

3. Liquidity Services, Inc. (LQDT): $13.91

Shares of this online auction company were acquired by 2 insiders:

  • Director Jaime Mateus-Tique acquired 180,000 shares, paying $12.64 per share for a total amount of $2.28 million. These shares were purchased indirectly through a trust.
  • CFO, Treasurer, President RSCG James M. Rallo acquired 35,720 shares, paying $12.54 per share for a total amount of $447,880. These shares were purchased indirectly through various entities.

Voluntary Disclosure: I hold a long position in Liquidity Services, Inc. (LQDT).

You can view the list of recent insider transactions for Liquidity Services, Inc. here.

P/E: 13.11 Forward P/E: 14.64 Industry P/E: N/A
P/S: 0.86 Price/Book: 1.3 EV/EBITDA: 4.27
Market Cap: $446.16M Avg. Daily Volume: 1,145,570 52 Week Range: $12.05 – $40.9

4. Gogo Inc. (GOGO): $13.68

Shares of this provider of WiFi services to airlines were acquired by 4 insiders:

  • Director Charles C. Townsend acquired 100,000 shares, paying $12.89 per share for a total amount of $1.29 million. These shares were purchased indirectly through a trust.
  • President and CEO Michael Small acquired 30,000 shares, paying $12.96 per share for a total amount of $388,758. Mr. Small increased his stake by 34.12% to 117,919 shares with this purchase.
  • Director Oakleigh Thorne acquired 13,001 shares, paying $13.46 per share for a total amount of $174,993. These shares were purchased indirectly through a trust.
  • Director Robert H. Mundheim acquired 5,000 shares, paying $13.17 per share for a total amount of $65,857. Mr. Mundheim increased his stake by 6.60% to 80,769 shares with this purchase.

Voluntary Disclosure: I hold a long position in Gogo Inc. (GOGO).

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 3.36 Price/Book: 4.08 EV/EBITDA: 91.68
Market Cap: $1.16B Avg. Daily Volume: 3,610,170 52 Week Range: $1.42 – $35.77

5. Intrexon Corporation (XON): $18.03

Shares of this biotech company were acquired by 6 insiders:

  • Chief Executive Officer Randal J. Kirk acquired 65,173 shares, paying $15.19 per share for a total amount of $990,007. These shares were purchased indirectly by MGK 2009.
  • Chief Operating Officer Krish S. Krishnan acquired 20,900 shares, paying $14.21 per share for a total amount of $297,022.
  • SVP–Food Sector Thomas R. Kasser acquired 10,000 shares, paying $13.39 per share for a total amount of $133,900. Mr. Kasser increased his stake by 200.00% to 15,000 shares with this purchase.
  • SVP-Consumer Sector Kelly Huang acquired 3,200 shares, paying $15.78 per share for a total amount of $50,496.
  • Chief Legal Officer Donald P. Lehr acquired 1,850 shares, paying $15.99 per share for a total amount of $29,581. Mr. Lehr increased his stake by 13.73% to 15,326 shares with this purchase.

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

P/E: N/A Forward P/E: 60.1 Industry P/E: N/A
P/S: 63.88 Price/Book: 4.26 EV/EBITDA: -25.12
Market Cap: $1.75B Avg. Daily Volume: 867,160 52 Week Range: $13.13 – $38.5

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

Notable Insider Sales:

1. ServiceNow, Inc. (NOW): $47.39

Shares of this software-as-a-service provider were sold by 4 insiders:

  • Chief Product Officer Frederic B. Luddy sold 151,400 shares for $47.59, generating $7.2 million from the sale. 50,000 of these shares were sold indirectly by Frederic B. Luddy CRT, LLC and 1,400 shares were sold indirectly by Mr. Luddy’s spouse.
  • SVP Worldwide Sales & Services David Schneider sold 31,000 shares for $46.55, generating $1.44 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President & CEO Frank Slootman sold 20,000 shares for $46.94, generating $938,734 from the sale. These shares were sold indirectly through a trust.
  • Chief Financial Officer Michael Scarpelli sold 20,000 shares for $48.10, generating $962,004 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: 215.41 Industry P/E: N/A
P/S: 14.36 Price/Book: 16.99 EV/EBITDA: -102.83
Market Cap: $6.80B Avg. Daily Volume: 2,587,670 52 Week Range: $35.21 – $71.8

2. Vornado Realty Trust (VNO): $105.84

EVP – Finance, Chief Administrative Officer Joseph Macnow sold 72,321 shares of this REIT – Diversified for $105.76, generating $7.65 million from the sale.69,080 of these shares were sold indirectly by Mr. Macnow’s spouse and 22,949 shares were sold as a result of exercising options immediately prior to the sale.

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

P/E: 89.09 Forward P/E: 21 Industry P/E: N/A
P/S: 7.77 Price/Book: 3.74 EV/EBITDA: 23.03
Market Cap: $19.84B Avg. Daily Volume: 930,702 52 Week Range: $76.19 – $106.65

3. The Chubb Corporation (CB): $92.71

Shares of this property & casualty insurance company were sold by 4 insiders:

  • Chairman, President and C.E.O. John D. Finnegan sold 50,000 shares for $93.27, generating $4.66 million from the sale.
  • Executive Vice President Richard G. Spiro sold 15,237 shares for $93.19, generating $1.42 million from the sale.
  • EVP Harold Lawrence Morrison Jr. sold 8,000 shares for $92.25, generating $738,010 from the sale.
  • Executive Vice President Mark P. Korsgaard sold 3,860 shares for $93.52, generating $361,005 from the sale.

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

P/E: 11.09 Forward P/E: 11.75 Industry P/E: N/A
P/S: 1.62 Price/Book: 1.42 EV/EBITDA: 7.42
Market Cap: $22.67B Avg. Daily Volume: 1,379,780 52 Week Range: $81.68 – $97.79

4. JB Hunt Transport Services Inc. (JBHT): $76.89

Director Earl Wayne Garrison sold 89,210 shares of this trucking company for $77.20, generating $6.89 million from the sale.

You can view the list of recent insider transactions for JB Hunt Transport Services Inc. here.

P/E: 27.06 Forward P/E: 20.13 Industry P/E: N/A
P/S: 1.58 Price/Book: 8.45 EV/EBITDA: 11.57
Market Cap: $9.02B Avg. Daily Volume: 941,006 52 Week Range: $67.97 – $79.89

5. Honeywell International Inc. (HON): $91.2

Shares of this industrial technology and manufacturing company were sold by 2 insiders:

  • Vice Chairman Andreas Kramvis sold 71,575 shares for $94.08, generating $6.73 million from the sale. 16,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • President & CEO, PMT Darius Adamczyk sold 1,611 shares for $93.20, generating $150,145 from the sale.

You can view the list of recent insider transactions for Honeywell International Inc. here.

P/E: 18.28 Forward P/E: 14.81 Industry P/E: N/A
P/S: 1.81 Price/Book: 3.98 EV/EBITDA: 11.3
Market Cap: $71.42B Avg. Daily Volume: 2,975,050 52 Week Range: $76.15 – $95.91

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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