Insider Trading 31 October 2014: Microsoft, Apple, Charles Schwab Selling

November 3rd, 2014
in contributors

by Asif Suria

Insider buying increased last week with insiders buying $63.4 million of stock compared to $56.48 million in the week prior. Selling also increased significantly with insiders selling $1.51 billion of stock last week compared to $393.38 million in the week prior. More than a third of the selling was driven by sales of Microsoft by Bill Gates.

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 23.88. In other words, insiders sold almost 24 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 6.96.

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 October 31, 2014

Insider Sell Buy Ratio October 31, 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. AGCO Corporation (AGCO): $44.31

Director Mallika Srinivasan acquired 45,000 shares of this farm & construction machinery company, paying $45.21 per share for a total amount of $2.03 million. These shares were purchased indirectly by Chennai, India based TAFE Motors and Tractors Limited.

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

P/E: 9.03 Forward P/E: 13.35 Industry P/E: 14.79
P/S: 0.41 Price/Book: 1.09 EV/EBITDA: 5.18
Market Cap: $4.14B Avg. Daily Volume: 1,513,800 52 Week Range: $41.83 – $61.39

 

2. The Dow Chemical Company (DOW): $49.4

Director Paul Polman acquired 21,500 shares of this chemical company, paying $46.56 per share for a total amount of $1 million. Mr. Polman increased his stake by 111.86% to 40,720 shares with this purchase.

You can view the list of recent insider transactions for The Dow Chemical Company here.

P/E: 16.22 Forward P/E: 14.36 Industry P/E: 17.07
P/S: 0.97 Price/Book: 2.59 EV/EBITDA: 8.98
Market Cap: $57.66B Avg. Daily Volume: 10,095,400 52 Week Range: $38.16 – $54.97

 

3. Tile Shop Holdings, Inc. (TTS): $8.61

Director Peter H. Kamin acquired 114,972 shares of this retailer and manufacturer of stone tiles, paying $8.49 per share for a total amount of $975,618. Mr. Kamin increased his stake by 79.55% to 259,508 shares with this purchase.

At first blush this looked like an interesting high-growth company that has plenty of room for growth beyond its current footprint of 105 stores in 30 states. The company opened 6 new stores in the third quarter but saw same store sales decline 0.5% in the first 9 months of the year.

The stock is down more than 60% over the last year with the most recent plunge in stock price driven by an announcement that the company’s founder and CEO is retiring in January 2015. This announcement came at the same time the company reported third quarter results that missed both top line and bottom line expectations. Third quarter revenue grew 10.6% year-over-year to $62.8 million but net income dropped sharply to $1.5 million or 3 cents per share when compared to $4.05 million or 8 cents per share last year.

The company also issued a cautious outlook for the full year expecting to generate earnings of 23 to 25 cents per share on sales of $257 to $261 million. Despite the drop in the stock price over the last year, it would have to come down a whole lot more to provide an adequate margin of safety for GARP investors.

You can view the list of recent insider transactions for Tile Shop Holdings, Inc. here.

P/E: 42.41 Forward P/E: 26.91 Industry P/E: N/A
P/S: 1.71 Price/Book: 4.65 EV/EBITDA: 13.36
Market Cap: $441.81M Avg. Daily Volume: 490,418 52 Week Range: $6.94 – $23.37

 

4. Opko Health, Inc. (OPK): $8.35

CEO & Chairman Phillip Frost M.D. acquired 107,500 shares of this medical devices and drug development company, paying $8.38 per share for a total amount of $900,434. These shares were purchased indirectly by Frost Gamma Investments Trust.

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: 28.18
P/S: 41.32 Price/Book: 3.9 EV/EBITDA: -41.61
Market Cap: $3.58B Avg. Daily Volume: 2,216,400 52 Week Range: $7.32 – $11.64

 

5. Unifi Inc. (UFI): $27.97

Director Kenneth G. Langone acquired 35,000 shares of this textile company, paying $25.70 per share for a total amount of $899,420. Mr. Langone increased his stake by 3.55% to 1,019,625 shares with this purchase. 12,000 of these shares were purchased indirectly by Invemed Associates LLC and 1,000 shares were purchased indirectly by Mr. Langone’s wife.

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

P/E: 20.02 Forward P/E: 13.38 Industry P/E: 12.31
P/S: 0.72 Price/Book: 1.76 EV/EBITDA: 11.96
Market Cap: $508.08M Avg. Daily Volume: 67,819 52 Week Range: $20.76 – $30.93

 

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $46.95

Shares of Microsoft were sold by 3 insiders:

  • Founder Bill Gates sold 12,500,000 shares for $46.21, generating $577.6 million from the sale.
  • Chief Accounting Officer Frank H. Brod sold 22,000 shares for $45.81, generating $1 million from the sale.
  • Director Maria Klawe sold 3,000 shares for $45.97, generating $137,895 from the sale.

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

P/E: 18.4 Forward P/E: 14.95 Industry P/E: 26.68
P/S: 4.15 Price/Book: 4.22 EV/EBITDA: 9.69
Market Cap: $387.00B Avg. Daily Volume: 34,234,800 52 Week Range: $34.63 – $47.57

 

2. Apple Inc. (AAPL): $108

Senior Vice President Eduardo H. Cue sold 261,935 shares of Apple for $106.79, generating $27.97 million from the sale.

Voluntary Disclosure: I hold a long position in Apple.

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

P/E: 16.74 Forward P/E: 12.75 Industry P/E: 22.22
P/S: 3.43 Price/Book: 5.63 EV/EBITDA: 10.65
Market Cap: $633.40B Avg. Daily Volume: 58,794,400 52 Week Range: $70.51 – $108.04

 

3. The Charles Schwab Corporation (SCHW): $28.67

Chairman Charles R. Schwab sold 750,000 shares of this investment brokerage for $27.63, generating $20.73 million from the sale.

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

P/E: 30.7 Forward P/E: 25.37 Industry P/E: 18.28
P/S: 6.13 Price/Book: 3.51 EV/EBITDA: N/A
Market Cap: $37.37B Avg. Daily Volume: 7,040,380 52 Week Range: $22.62 – $31

 

4. EMC Corporation (EMC): $28.73

Shares of this data storage and IT infrastructure company were sold by 8 insiders:

  • President & COO, Glob Enterprise Services Howard D. Elias sold 150,000 shares for $27.86, generating $4.18 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Vice Chairman William J. Teuber sold 150,000 shares for $27.65, generating $4.15 million from the sale.
  • CFO, EMC II & CAO, EMC Denis Cashman sold 117,250 shares for $27.43, generating $3.22 million from the sale. 85,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • EVP & General Counsel Paul T. Dacier sold 74,753 shares for $27.40, generating $2.05 million from the sale.
  • President, Prod & Marketing Jeremy Burton sold 74,742 shares for $27.39, generating $2.05 million from the sale. 47,684 of these shares were sold as a result of exercising options immediately prior to the sale.
  • EVP, Office of the Chairman Harry L. You sold 59,192 shares for $27.49, generating $1.63 million from the sale. 42,485 of these shares were sold as a result of exercising options immediately prior to the sale.
  • CEO, EMCII David I. Goulden sold 35,000 shares for $27.51, generating $963,022 from the sale.
  • Executive Chairman, RSA Arthur W. Coviello sold 15,000 shares for $27.90, generating $418,500 from the sale.

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

P/E: 23.13 Forward P/E: 13.43 Industry P/E: 18.79
P/S: 2.41 Price/Book: 2.55 EV/EBITDA: 10.08
Market Cap: $58.47B Avg. Daily Volume: 15,332,900 52 Week Range: $23.15 – $30.18

 

5. Cathay General Bancorp (CATY): $26.41

Shares of this regional bank were sold by 2 insiders:

  • Vice Chairman Anthony M. Tang sold 400,000 shares for $25.82, generating $10.33 million from the sale. These shares were sold indirectly by Mr. Tang’s spouse.
  • EVP – Chief Risk Officer Kim R. Bingham sold 1,500 shares for $24.88, generating $37,320 from the sale.

You can view the list of recent insider transactions for Cathay General Bancorp here.

P/E: 15.72 Forward P/E: 14.59 Industry P/E: 16.11
P/S: 5.32 Price/Book: 1.31 EV/EBITDA: N/A
Market Cap: $2.10B Avg. Daily Volume: 337,800 52 Week Range: $22.7 – $27.94

 

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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