Insider Trading 07 November 2014: Bill Gates Continues to Sell Microsoft

November 10th, 2014
in contributors

by Asif Suria

Insider buying increased last week with insiders buying $90.85 million of stock compared to $63.4 million in the week prior. Selling also increased significantly with insiders selling $2.18 billion of stock last week compared to $1.51 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 edged up a little to 23.95. 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 23.88.

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 November 7, 2014

Insider Sell Buy Ratio November 7, 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. Southern Copper Corp. (SCCO): $30.2

Chairman of the Board German Larrea Mota-Velasco acquired 500,000 shares of this copper mining company, paying $28.87 per share for a total amount of $14.44 million. Mr. Velasco increased his stake by 31.86% to 2,069,367 shares with this purchase.

This is the fifth week we are reporting large purchases of Southern Copper by Mr. Mota-Velasco and these were his largest purchases yet. We wrote the following about the company after his last set of purchases 7 weeks ago,

As the name implies, Southern Copper generates a majority (75%) of its revenue from copper, 12% from molybdenum and nearly 5% from silver. While the company appears to be well run, the headwinds they have faced include low copper prices, high stockpiles of copper and low silver prices.

While the company expects copper supply to drop and sees signs of stockpiles depleting, it remains to be seen if global demand and hence prices will pick up. Southern Copper is spending aggressively (CapEx is well over net income) and expects their copper production capacity to increase 87% by 2015 when compared to 2013 levels. They obviously see a brighter future than is evident right now.

One bright spot for the company right now is molybdenum, where they saw a 30% increase in production last quarter. Molybdenum prices are also up sharply this year despite some weakness in the summer.

You can view the list of recent insider transactions for Southern Copper Corp. here.

P/E: 18.09 Forward P/E: 15.65 Industry P/E: 17.38
P/S: 4.05 Price/Book: 4.06 EV/EBITDA: 9.87
Market Cap: $24.71B Avg. Daily Volume: 1,975,620 52 Week Range: $24.5 – $33.9

 

2. Huntsman Corporation (HUN): $24.69

Director Nolan D. Archibald acquired 450,000 shares of this chemicals producer, paying $23.99 per share for a total amount of $10.79 million. Mr. Archibald increased his stake by 890.68% to 500,523 shares with this purchase.

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

P/E: 15.05 Forward P/E: 9.01 Industry P/E: 17.84
P/S: 0.54 Price/Book: 2.71 EV/EBITDA: 7.57
Market Cap: $6.03B Avg. Daily Volume: 3,579,600 52 Week Range: $20.36 – $29.33

 

3. NuStar Energy L.P. (NS): $60.2

Director William E. Greehey acquired 100,000 shares of this oil & gas pipeline company, paying $62.06 per share for a total amount of $6.21 million. Mr. Greehey increased his stake by 4.05% to 2,569,613 shares with this purchase.

You can view the list of recent insider transactions for NuStar Energy L.P. here.

P/E: N/A Forward P/E: 23.89 Industry P/E: 32.74
P/S: 1.47 Price/Book: 2.65 EV/EBITDA: 13.83
Market Cap: $4.69B Avg. Daily Volume: 463,722 52 Week Range: $43.8 – $68.33

 

4. Crown Castle International Corp. (CCI): $79.8

Director J. Landis Martin acquired 60,000 shares of this wireless communications tower company, paying $79.47 per share for a total amount of $4.77 million. Mr. Martin increased his stake by 1078.75% to 65,562 shares with this purchase.

Crown Castle has been on a radar for several years on account of consistent sales by company insiders. It is interesting this purchase by Mr. Martin, who has been the Chairman of the Board since 1999 and has been on the board of directors since 1995. His last insider transaction was a sale of 103,000 shares at an average price of $52.32 back in March 2012.

You can view the list of recent insider transactions for Crown Castle International Corp. here.

P/E: 206.2 Forward P/E: 17.62 Industry P/E: 25.21
P/S: 7.54 Price/Book: 3.88 EV/EBITDA: 19.08
Market Cap: $26.53B Avg. Daily Volume: 2,997,640 52 Week Range: $68.44 – $84.97

 

5. Sonus Networks, Inc. (SONS): $3.75

CEO and President Raymond P. Dolan acquired 1,000,000 shares of this networking equipment manufacturer, paying $3.43 per share for a total amount of $3.43 million. Mr. Dolan increased his stake by 27.94% to 4,578,674 shares with this purchase.

I picked up shares of Sonus following purchases by both the CEO and CFO under $3 per share earlier this year. While net income was negative, free cash flow was positive, the company was growing revenue, insiders were buying shares and the company was also buying back shares.

The company has been transitioning from lower margin legacy products to higher margin Session Border Controller (SBC) products. One near-term concern is a plan to do a reverse stock split. While reverse stock splits work in some cases (Priceline.com for example), most stocks that undergo a reverse stock split often tend to drop following the split.

Voluntary Disclosure: I hold a long position in Sonus Networks, Inc.

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

P/E: N/A Forward P/E: 34.09 Industry P/E: 22.48
P/S: 3.11 Price/Book: 3.81 EV/EBITDA: 362.38
Market Cap: $926.72M Avg. Daily Volume: 2,854,050 52 Week Range: $2.68 – $4.25

 

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $48.68

Founder Bill Gates sold 7,500,000 shares of Microsoft for $46.34, generating $347.58 million from the sale.

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

P/E: 19.08 Forward P/E: 15.45 Industry P/E: 27.6
P/S: 4.39 Price/Book: 4.46 EV/EBITDA: 10.12
Market Cap: $401.26B Avg. Daily Volume: 33,991,700 52 Week Range: $34.63 – $48.92

 

2. Seagate Technology Public Limited Company (STX): $61.56

Shares of this data storage company were sold by 7 insiders:

  • Chairman and CEO Stephen J. Luczo sold 383,813 shares for $62.32, generating $23.92 million from the sale. 107,983 of these shares were sold indirectly through a trust.
  • EVP,General Counsel, CAO Kenneth M. Massaroni sold 66,310 shares for $62.27, generating $4.13 million from the sale.
  • EVP, Operations and R&D William D. Mosley sold 64,939 shares for $62.19, generating $4.04 million from the sale.
  • Executive Vice President,Sales David K. Richarz sold 25,372 shares for $64.35, generating $1.63 million from the sale.
  • General Manager, Samsung HDD Douglas J. Dehaan sold 23,087 shares for $62.14, generating $1.43 million from the sale.
  • EVP & Chief Financial Officer Patrick O’Malley sold 13,230 shares for $63.34, generating $838,042 from the sale.
  • Director Chong Sup Park sold 1,250 shares for $62.57, generating $78,218 from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for Seagate Technology Public Limited Company here.

P/E: 13.72 Forward P/E: 10.65 Industry P/E: N/A
P/S: 1.46 Price/Book: 6.94 EV/EBITDA: 8.17
Market Cap: $20.13B Avg. Daily Volume: 2,802,410 52 Week Range: $47.25 – $65

 

3. Six Flags Entertainment Corporation (SIX): $40.05

Chairman, President & CEO James Reid-Anderson sold 800,000 shares of this theme park operator for $40.04, generating $32.04 million from the sale.

You can view the list of recent insider transactions for Six Flags Entertainment Corporation here.

P/E: 31.79 Forward P/E: 27.62 Industry P/E: 31.66
P/S: 3.26 Price/Book: 10.81 EV/EBITDA: 13.25
Market Cap: $3.75B Avg. Daily Volume: 1,035,750 52 Week Range: $31.77 – $43.19

 

4. Molina Healthcare, Inc. (MOH): $48.75

Shares of this medicaid-related solutions provider were sold by 13 insiders:

  • President & CEO Mario J. Molina MD sold 60,000 shares for $48.67, generating $2.92 million from the sale. These shares were sold indirectly through a trust.
  • Chief Operating Officer Terry Bayer sold 42,750 shares for $48.76, generating $2.08 million from the sale. 31,500 of these shares were sold as a result of exercising options immediately prior to the sale.
  • CFO John C. Molina sold 20,550 shares for $48.66, generating $999,996 from the sale.
  • Chief Legal Officer Jeff D. Barlow sold 17,752 shares for $48.91, generating $868,211 from the sale.
  • Chief Accounting Officer Joseph W. White sold 10,562 shares for $49.40, generating $521,800 from the sale.
  • Director Garrey Carruthers sold 9,500 shares for $48.56, generating $461,337 from the sale.
  • Director Charles Z. Fedak sold 9,000 shares for $48.64, generating $437,755 from the sale.
  • Director John P. Szabo sold 5,878 shares for $48.45, generating $284,789 from the sale.
  • Director Daniel Cooperman sold 5,200 shares for $48.73, generating $253,396 from the sale. These shares were sold indirectly through a trust.
  • Director Frank E. Murray sold 5,000 shares for $48.67, generating $243,350 from the sale.
  • Director Dale B. Wolf sold 5,000 shares for $48.98, generating $244,900 from the sale.
  • Director Ronna Romney sold 5,000 shares for $49.53, generating $247,640 from the sale.
  • Director Steven James sold 3,000 shares for $49.71, generating $149,130 from the sale.

You can view the list of recent insider transactions for Molina Healthcare, Inc. here.

P/E: 118.04 Forward P/E: 18.47 Industry P/E: 22.83
P/S: 0.28 Price/Book: 2.43 EV/EBITDA: 4.47
Market Cap: $2.36B Avg. Daily Volume: 803,328 52 Week Range: $31.18 – $49.84

 

5. Bank of the Ozarks, Inc. (OZRK): $36.3

Shares of this regional bank were sold by 3 insiders:

  • Director Ross M. Whipple sold 200,000 shares for $35.20, generating $7.04 million from the sale. These shares were sold indirectly by an LLLP.
  • Chairman & CEO George G. Gleason II sold 64,000 shares for $35.43, generating $2.27 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • President Leasing Division Jay Scott Hastings sold 9,742 shares for $35.52, generating $346,003 from the sale. 4,000 of 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 Bank of the Ozarks, Inc. here.

P/E: 26.3 Forward P/E: 18.62 Industry P/E: 18.78
P/S: 9.33 Price/Book: 3.25 EV/EBITDA: N/A
Market Cap: $2.89B Avg. Daily Volume: 431,831 52 Week Range: $24.72 – $36.32

 

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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