Insider Trading 30 January 2015: Bill Gates Again Selling Microsoft, Charles Schwab Selling Schwab

February 1st, 2015
in contributors

by Asif Suria

Insider buying increased significantly last week with insiders buying $196.76 million of stock compared to $16.43 million in the week prior. Selling also increased with insiders selling $1.49 billion of stock last week compared to $936.53 million in the week prior. The big jump in insider buying was partially on account of existing insiders participating in certain secondary offerings and the partial removal of the earnings related overhang.

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 to 7.56. In other words, insiders sold almost 8 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 57.

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 January 30, 2015

Insider Sell Buy Ratio January 30, 2015

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. A. M. Castle & Co. (CAS): $6.05

10% Owner William C. Martin acquired 250,000 shares of this specialty metals and plastics distribution company, paying $6.04 per share for a total amount of $1.51 million.

We normally do not highlight insider purchases by non-management 10% owners but decided to make an exception in this case. This purchase caught my eye because Mr. Martin founded the message board Raging Bull in 1997 and then the site InsiderScore in 2004. InsiderScore also provides insider trading information but it appears to be a premium product targeted towards professional money managers. He is also the founder of the investment partnership Raging Capital Management, which was founded in 2006 and has an estimated portfolio of $893 million.

A. M. Castle has a leveraged balance sheet, declining revenue and negative operating margins. Given these uninspiring numbers, I am baffled by Mr. Martin’s interest in the company. Quite clearly he sees something in the company that most other investors don’t, as the stock is down 56% over the last year and down 24% just since the start of 2015.

You can view the list of recent insider transactions for A. M. Castle & Co. here.

P/E: N/A Forward P/E: N/A Industry P/E: 17.19
P/S: 0.14 Price/Book: 0.66 EV/EBITDA: -50.76
Market Cap: $142.20M Avg. Daily Volume: 264,323 52 Week Range: $5.52 – $15.64

 

2. Microsoft Corporation (MSFT): $40.4

Director Charles W. Scharf acquired 23,612 shares of Microsoft, paying $42.34 per share for a total amount of $999,654. Mr. Scharf increased his stake by 660.29% to 27,188 shares with this purchase.

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

P/E: 16.3 Forward P/E: 13.69 Industry P/E: 27.47
P/S: 3.69 Price/Book: 3.76 EV/EBITDA: 8.05
Market Cap: $331.43B Avg. Daily Volume: 33,941,600 52 Week Range: $35.69 – $50.05

 

3. Five Prime Therapeutics, Inc. (FPRX): $26.31

Director Franklin M. Berger acquired 25,000 shares of this biotech company, paying $27.03 per share for a total amount of $675,750. Mr. Berger increased his stake by 208.33% to 37,000 shares with this purchase.

You can view the list of recent insider transactions for Five Prime Therapeutics, Inc. here.

P/E: N/A Forward P/E: N/A Industry P/E: 34.32
P/S: 30.73 Price/Book: 5.95 EV/EBITDA: -13.89
Market Cap: $566.98M Avg. Daily Volume: 314,076 52 Week Range: $10.5 – $28.47

 

4. Regions Financial Corporation (RF): $8.7

CFO David J. Turner Jr. acquired 65,000 shares of this regional bank, paying $9.16 per share for a total amount of $595,098. These shares were acquired indirectly through a trust.

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

P/E: 10.89 Forward P/E: 9.89 Industry P/E: 16.77
P/S: 2.39 Price/Book: 0.74 EV/EBITDA: N/A
Market Cap: $11.78B Avg. Daily Volume: 16,519,300 52 Week Range: $8.59 – $11.54

 

Voluntary Disclosure: I hold a long position in Regions Financial Corporation (RF)

5. Texas Capital BancShares Inc. (TCBI): $40.85

President and CEO C. Keith Cargill acquired 10,000 shares of this regional bank, paying $43.12 per share for a total amount of $431,200. Mr. Cargill increased his stake by 78.43% to 22,750 shares with this purchase.

You can view the list of recent insider transactions for Texas Capital BancShares Inc. here.

P/E: 14.18 Forward P/E: 11.81 Industry P/E: 14.1
P/S: 3.86 Price/Book: 1.44 EV/EBITDA: N/A
Market Cap: $1.87B Avg. Daily Volume: 744,711 52 Week Range: $40.4 – $67.08

 

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $40.4

Founder Bill Gates sold 1,000,000 shares of Microsoft for $41.68, generating $41.68 million from the sale.

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

P/E: 16.3 Forward P/E: 13.69 Industry P/E: 27.47
P/S: 3.69 Price/Book: 3.76 EV/EBITDA: 8.05
Market Cap: $331.43B Avg. Daily Volume: 33,941,600 52 Week Range: $35.69 – $50.05

 

2. Twitter, Inc. (TWTR): $37.53

Shares of Twitter were sold by 3 insiders:

  • Director Evan Clark Williams sold 372,000 shares for $39.10, generating $14.55 million from the sale. These shares were sold indirectly through various trusts.
  • Director Jack Dorsey sold 50,417 shares for $39.87, generating $2.01 million from the sale. These shares were sold indirectly through a trust.
  • VP, Engineering Alexander Roetter sold 206 shares for $38.49, generating $7,930 from the sale.

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

P/E: N/A Forward P/E: 110.38 Industry P/E: 37.89
P/S: 19.66 Price/Book: 6.51 EV/EBITDA: -27.42
Market Cap: $23.46B Avg. Daily Volume: 19,640,400 52 Week Range: $29.51 – $67.24

 

Voluntary Disclosure: I hold a long position in Twitter (TWTR)

3. The Charles Schwab Corporation (SCHW): $25.98

Chairman Charles R. Schwab sold 277,609 shares of this investment brokerage for $27.23, generating $7.56 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 27.35 Forward P/E: 16.55 Industry P/E: 19.43
P/S: 5.67 Price/Book: 3.24 EV/EBITDA: N/A
Market Cap: $33.92B Avg. Daily Volume: 6,850,620 52 Week Range: $23.35 – $31

 

4. Lions Gate Entertainment Corp. (LGF): $28.73

Chief Executive Officer Jon Feltheimer sold 250,000 shares of this movie production and distribution company for $28.78, generating $7.19 million from the sale.

You can view the list of recent insider transactions for Lions Gate Entertainment Corp. here.

P/E: 21.54 Forward P/E: 16.32 Industry P/E: 27.05
P/S: 1.57 Price/Book: 7.19 EV/EBITDA: 18.82
Market Cap: $4.02B Avg. Daily Volume: 1,156,300 52 Week Range: $24.54 – $35.75

 

5. Electronic Arts Inc. (EA): $54.86

Shares of this video games company were sold by 3 insiders:

  • EVP Legal & Business Affairs Joel Linzner sold 60,000 shares for $55.00, generating $3.29 million from the sale. 30,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • SVP, Chief Accounting Officer Kenneth A. Barker sold 39,800 shares for $54.77, generating $2.18 million from the sale.
  • Chief Operating Officer Peter R. Moore sold 28,691 shares for $55.00, generating $1.58 million from the sale.

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

P/E: 21.16 Forward P/E: 20.94 Industry P/E: 20.95
P/S: 3.86 Price/Book: 6.4 EV/EBITDA: 12.96
Market Cap: $17.06B Avg. Daily Volume: 4,182,680 52 Week Range: $25.56 – $55.8

 

You can view the full list of sales from this Insider Sales page.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter@asifsuria









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