December 7th, 2014
by Asif Suria
Insider buying decreased last week with insiders buying $44.02 million of stock compared to $59.33 million in the week prior. Selling also declined with insiders selling $1.47 billion of stock last week compared to $1.73 billion in the week prior.
With the energy sector in turmoil on account of falling oil prices, it was interesting to see several insider purchases this week that were related to the energy sector. We saw buying in everything from oil exploration companies to companies that provide services or materials to the industry. Several of these stocks have lost more than half their value this year and it is possible that these insiders are early as we saw with the insiders of Noble (NE), who saw the stock drop nearly 50% following their purchases earlier this year.
Two of these energy sector related stocks (OCIP and HCLP) made the list of top 5 purchases this week. Others that did not make the list include Transocean (RIG), Continental Resources (CLR),Jones Energy (JONE), DXP Enterprises (DXPE), EP Energy Corp (EPE) and Mid-Con Energy Partners (MCEP) just to name a few.
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 33.47. In other words, insiders sold more than 33 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 29.22. 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 December 5, 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. SFX Entertainment Inc. (SFXE): $4.41
Shares of this live events and digital entertainment producer were acquired by 2 insiders:
- CEO and Chairman of the Board Robert F. Sillerman acquired 2,183,836 shares, paying $4.26 per share for a total amount of $9.3 million. These shares were purchased indirectly by Sillerman Investment Company III LLC.
- V.C. of the Board of Directors Mitchell J. Slater acquired 40,000 shares, paying $4.42 per share for a total amount of $176,900.
This is the third week in a row we have reported insider purchases by Mr. Sillerman.
You can view the list of recent insider transactions for SFX Entertainment Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 25.27|
|P/S: 1.14||Price/Book: 1.43||EV/EBITDA: -8.32|
|Market Cap: $399.40M||Avg. Daily Volume: 794,641||52 Week Range: $3.52 – $12.15|
2. OCI Partners LP (OCIP): $16.72
Director Nassef Sawiris acquired 191,715 shares of this ammonia and methanol production company, paying $16.98 per share for a total amount of $3.26 million. These shares were purchased indirectly by NNS Holding.
You can view the list of recent insider transactions for OCI Partners LP here.
|P/E: 43.77||Forward P/E: 8.28||Industry P/E: 18.77|
|P/S: 3.26||Price/Book: 11.42||EV/EBITDA: 9.22|
|Market Cap: $1.35B||Avg. Daily Volume: 45,416||52 Week Range: $16.38 – $28.73|
3. Prospect Capital Corporation (PSEC): $8.89
Shares of this business development company were acquired by 2 insiders:
- CFO, CCO, Treasury & Secretary Brian H. Oswald acquired 162,500 shares, paying $9.12 per share for a total amount of $1.48 million. Mr. Oswald increased his stake by 109.06% to 311,500 shares with this purchase.
- Chief Operating Officer M. Grier Eliasek acquired 50,000 shares, paying $9.10 per share for a total amount of $455,000. Mr. Eliasek increased his stake by 25.36% to 247,196 shares with this purchase.
You can view the list of recent insider transactions for Prospect Capital Corporation here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 13.57|
|P/S: N/A||Price/Book: N/A||EV/EBITDA: N/A|
|Market Cap: $N/A||Avg. Daily Volume: N/A||52 Week Range: $8.5 – $11.4|
4. Hi-Crush Partners LP (HCLP): $35.68
Co-CEO and Director Robert E. Rasmus acquired 30,000 shares of this producer of monocrystalline sand, paying $38.70 per share for a total amount of $1.16 million. These shares were purchased indirectly by RER Investments LLC.
You can view the list of recent insider transactions for Hi-Crush Partners LP here.
|P/E: 11.68||Forward P/E: 8.34||Industry P/E: 17.32|
|P/S: 4.79||Price/Book: 8.4||EV/EBITDA: 13|
|Market Cap: $1.32B||Avg. Daily Volume: 692,814||52 Week Range: $30.51 – $71.88|
5. Rocket Fuel Inc. (FUEL): $15.16
Co-Founder, CEO & Chairman George H. John acquired 60,000 shares of this digital advertising company, paying $17.23 per share for a total amount of $1.03 million. Mr. John increased his stake by 2.65% to 2,322,924 shares with this purchase.
Rocket Fuel has had a tough 2014 with the stock down over 75% this year even as the Nasdaq is up nearly 15%. While revenue is growing rapidly, losses have been growing as well. It is a little surprising that the short ratio is only 4.5 at this time, implying that shorts have probably covered what proved to be a very profitable trade. In simple terms, the company helps customers target their digital advertising effort for maximum ROI.
It was interesting to see that even as one co-founder was acquiring shares, the other one was selling them.
You can view the list of recent insider transactions for Rocket Fuel Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 20.92|
|P/S: 1.87||Price/Book: 2.06||EV/EBITDA: -19.82|
|Market Cap: $626.03M||Avg. Daily Volume: 782,367||52 Week Range: $14.29 – $71.89|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Twenty-First Century Fox, Inc. (FOX): $36.52
Chairman and CEO Keith Rupert Murdoch sold 3,000,000 shares of this entertainment company for $36.02, generating $108.07 million from the sale. These shares were sold indirectly through a trust.
You can view the list of recent insider transactions for Twenty-First Century Fox, Inc. here.
|P/E: 19.01||Forward P/E: 16.38||Industry P/E: N/A|
|P/S: 2.38||Price/Book: 4.83||EV/EBITDA: 13.89|
|Market Cap: $78.74B||Avg. Daily Volume: 3,591,970||52 Week Range: $30.02 – $36.57|
2. Google Inc. (GOOG): $525.26
Co-Founder Sergey Brin sold 166,668 shares of Google for $535.45, generating $89.24 million from the sale.
You can view the list of recent insider transactions for Google Inc. here.
|P/E: 27.64||Forward P/E: 17.87||Industry P/E: 37.2|
|P/S: 5.37||Price/Book: 3.69||EV/EBITDA: 15.28|
|Market Cap: $356.32B||Avg. Daily Volume: 1,825,980||52 Week Range: $502.8 – $604.83|
3. ServiceNow, Inc. (NOW): $62.63
Shares of this software-as-a-service provider were sold by 2 insiders:
- Chief Product Officer Frederic B. Luddy sold 151,400 shares for $61.59, generating $9.32 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.
- President & CEO Frank Slootman sold 120,000 shares for $61.84, generating $7.42 million 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: 313.15||Industry P/E: 17.33|
|P/S: 15.2||Price/Book: 22.08||EV/EBITDA: -92.01|
|Market Cap: $9.29B||Avg. Daily Volume: 1,249,630||52 Week Range: $44.17 – $71.8|
4. Advance Auto Parts Inc. (AAP): $154.18
Shares of this auto parts company were sold by 3 insiders:
- CEO Darren R. Jackson sold 75,000 shares for $150.11, generating $11.26 million from the sale. 755 of these share were sold to satisfy a tax withholding obligation upon the vesting of restricted stock units.
- Director Jimmie L. Wade sold 4,639 shares for $148.38, generating $688,335 from the sale. 104 of these shares were sold to satisfy a tax withholding obligation upon the vesting of restricted stock units.
- Director John C. Brouillard sold 4,235 shares for $150.89, generating $639,019 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 Advance Auto Parts Inc. here.
|P/E: 24.75||Forward P/E: 17.8||Industry P/E: 24.6|
|P/S: 1.24||Price/Book: 5.81||EV/EBITDA: 11.42|
|Market Cap: $11.25B||Avg. Daily Volume: 812,958||52 Week Range: $103.94 – $154.37|
5. Cisco Systems, Inc. (CSCO): $27.5
Shares of Cisco were sold by 3 insiders:
- Chairman and CEO John T. Chambers sold 250,000 shares for $27.50, generating $6.88 million from the sale.
- EVP and CFO Frank Calderoni sold 100,000 shares for $27.46, generating $2.75 million from the sale.
- SVP, Legal Services, General Counsel & Secretary Mark D. Chandler sold 78,191 shares for $27.90, generating $2.18 million from the sale.
You can view the list of recent insider transactions for Cisco Systems, Inc. here.
|P/E: 18.71||Forward P/E: 12.28||Industry P/E: 18.89|
|P/S: 3||Price/Book: 2.5||EV/EBITDA: 8.42|
|Market Cap: $140.62B||Avg. Daily Volume: 28,120,100||52 Week Range: $20.22 – $27.99|
You can view the full list of sales from this Insider Sales page.
Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria