Insider Trading 19 December 2014: The Time for Carl Icahn and Mark Rachesky to Buy

December 21st, 2014
in contributors

by Asif Suria

The prolific buying by insiders of energy companies lost some steam last week even as oil and energy stocks rebounded sharply along with the rest of the market. With the S&P 500 closing less than 5 points off its all-time high, insider buying also picked up with insiders buying $256.35 million of stock compared to $190.94 million in the week prior. Selling along increased sharply with insiders selling $2.59 billion of stock last week compared to $1.34 billion in the week prior.

We saw both Carl Icahn and Mark Rachesky add to their positions in diesel engine and truck manufacturer Navistar International (NAV) and we also saw Carl Icahn add to his stake in car rental company Hertz Global Holdings (HTZ).

Follow up:


Hertz has had a tough second half of the year following revelations of accounting irregularities that will require the company to restate its results for the last three years. The stock has stayed weak despite a large $2 million purchase by the CEO in late November.

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 increased to 10.1. In other words, insiders sold 10 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 7.02.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 19, 2014

Insider Sell Buy Ratio December 19, 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. American Homes 4 Rent (AMH): $17.31

Director B. Wayne Hughes acquired 1,000,000 shares of this real estate investment trust, paying $16.99 per share for a total amount of $16.99 million. These shares were purchased indirectly through trust.

Mr. Hughes is the billionaire founder of Public Storage (PSA) and retired as the CEO of PSA in 2012. He founded the former manager of American Homes 4 Rent in 2011.

You can view the list of recent insider transactions for American Homes 4 Rent here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: N/A EV/EBITDA: N/A
Market Cap: $N/A Avg. Daily Volume: N/A 52 Week Range: $15.76 – $18.85

 

2. Endurance Specialty Holdings Ltd. (ENH): $58.03

Chairman & Chief Executive Officer John Charman acquired 150,000 shares of this insurance company, paying $57.32 per share for a total amount of $8.59 million. 100,000 of these shares were purchased indirectly through various entities.

We mentioned in our last report that the $3.38 million purchase by Mr. Charman last week was the largest purchase we had seen from him since he assumed the role of CEO in May 2013. The purchases this week were significantly larger.

The company trades for 0.88 times tangible book value.

You can view the list of recent insider transactions for Endurance Specialty Holdings Ltd. here.

P/E: 8.67 Forward P/E: 9.9 Industry P/E: N/A
P/S: 1.26 Price/Book: 0.84 EV/EBITDA: 5.76
Market Cap: $2.60B Avg. Daily Volume: 168,047 52 Week Range: $49.58 – $60

 

3. RPC Inc. (RES): $14.11

Chairman of the Board R. Randall Rollins acquired 415,800 shares of this oilfield services and equipment provider, paying $11.99 per share for a total amount of $4.99 million. These shares were purchased indirectly by RFPS Management Co. II, LP

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

P/E: 15.01 Forward P/E: 13.97 Industry P/E: N/A
P/S: 1.35 Price/Book: 2.79 EV/EBITDA: 4.76
Market Cap: $3.08B Avg. Daily Volume: 1,639,780 52 Week Range: $11.55 – $25.15

 

4. La Jolla Pharmaceutical Co. (LJPC): $20.15

Director Kevin C. Tang acquired 232,925 shares of this biotech company, paying $12.85 per share for a total amount of $2.99 million. These shares were purchased indirectly Tang Capital Partners, LP

La Jolla Pharmaceuticals saw its stock head steadily higher following these purchases by Mr. Tang, ending the week with an unusually large 16.81% jump on Friday.

You can view the list of recent insider transactions for La Jolla Pharmaceutical Co. here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: 5.7 EV/EBITDA: -6.93
Market Cap: $306.78M Avg. Daily Volume: 174,056 52 Week Range: $0.16 – $20.41

 

5. Compass Diversified Holdings (CODI): $16.35

Shares of this private equity firm were purchased by two insiders:

  • Director and Chief Executive Alan B. Offenberg acquired 46,250 shares, paying $16.16 per share for a total amount of $747,343.
  • Assistant Secretary Elias Sabo acquired 45,126 shares, paying $15.95 per share for a total amount of $719,773.

You can view the list of recent insider transactions for Compass Diversified Holdings here.

P/E: 3.36 Forward P/E: 11.12 Industry P/E: N/A
P/S: 0.81 Price/Book: 1.13 EV/EBITDA: 10.65
Market Cap: $789.69M Avg. Daily Volume: 272,770 52 Week Range: $15.35 – $19.84

 

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

Notable Insider Sales:

1. Western Gas Partners LP (WES): $71.18

Director James R. Crane sold 300,000 shares of this oil & gas pipelines company for $68.77, generating $20.63 million from the sale.

You can view the list of recent insider transactions for Western Gas Partners LP here.

P/E: 31.34 Forward P/E: 30.03 Industry P/E: N/A
P/S: 6.67 Price/Book: 3.35 EV/EBITDA: 16.46
Market Cap: $8.48B Avg. Daily Volume: 544,561 52 Week Range: $58.5 – $79.81

 

2. Restoration Hardware Holdings, Inc. (RH): $96.4

Shares of this home furnishing company were sold by 3 insiders:

  • Director Thomas D. Mottola sold 163,733 shares for $95.25, generating $15.59 million from the sale.
  • Director Eri Chaya sold 20,000 shares for $93.74, generating $1.87 million from the sale.
  • Chief Financial and Administrative Officer Karen Boone sold 8,000 shares for $95.28, generating $762,240 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 Restoration Hardware Holdings, Inc. here.

P/E: 54.25 Forward P/E: 32.24 Industry P/E: N/A
P/S: 2.23 Price/Book: 6.13 EV/EBITDA: 15.6
Market Cap: $3.81B Avg. Daily Volume: 946,841 52 Week Range: $54.61 – $100.66

 

3. Graham Holdings (GHC): $880.53

Shares of this education and media company were sold by 3 insiders:

  • CEO and COB Donald Graham sold 12,977 shares for $900.36, generating $11.68 million from the sale. These shares were sold indirectly through a trust.
  • Senior VP-Finance and CFO Hal Jones sold 2,000 shares for $940.85, generating $1.88 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • Senior Vice President Ann McDaniel sold 400 shares for $886.01, generating $354,404 from the sale.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: N/A Price/Book: N/A EV/EBITDA: N/A
Market Cap: $N/A Avg. Daily Volume: N/A 52 Week Range: $611.47 – $950.08

 

4. Intercontinental Exchange, Inc. (ICE): $221.62

Shares of this financial services and brokerage company were sold by 2 insiders:

  • Chief Executive Officer Jeffrey C. Sprecher sold 38,700 shares for $216.74, generating $8.39 million from the sale. 30,000 of these shares were sold indirectly through CPEX and 8,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • General Counsel & Corporate Secretary Johnathan H. Short sold 963 shares for $223.38, generating $215,115 from the sale. 741 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 Intercontinental Exchange, Inc. here.

P/E: 47.2 Forward P/E: 18.62 Industry P/E: N/A
P/S: 8.87 Price/Book: 2.01 EV/EBITDA: 16.47
Market Cap: $25.50B Avg. Daily Volume: 801,247 52 Week Range: $182.4 – $229.5

 

5. Vertex Pharmaceuticals Incorporated (VRTX): $118.9

Shares of this biotech company were sold by 5 insiders:

  • CEO & President Jeffrey M. Leiden sold 50,017 shares for $114.97, generating $5.75 million from the sale.
  • Director Joshua S. Boger sold 10,500 shares for $110.66, generating $1.16 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • EVP & CFO Ian F. Smith sold 6,042 shares for $120.12, generating $725,738 from the sale.
  • SVP & Corp Controller Paul M. Silva sold 2,813 shares for $120.08, generating $337,780 from the sale.
  • SVP, Human Resources Thomas Connolly sold 520 shares for $120.06, generating $62,429 from the sale.

You can view the list of recent insider transactions for Vertex Pharmaceuticals Incorporated here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 35.98 Price/Book: 24.47 EV/EBITDA: -62.63
Market Cap: $28.60B Avg. Daily Volume: 1,734,840 52 Week Range: $59.79 – $124.35

 

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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