Insider Trading 01 May 2015: Schwab, Twitter Selling

May 3rd, 2015
in contributors

by Asif Suria

Insider buying decreased last week with insiders buying $32.77 million of stock compared to $38.91 million in the week prior. Selling on the other hand increased with insiders selling $1.15 billion of stock last week compared to $561.54 million 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 went up to 35.02. In other words, insiders sold more than 35 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 14.43.

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 May 1, 2015

Insider Sell Buy Ratio May 1, 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. Sears Holdings Corporation (SHLD): $40.52

10% Owner Bruce R. Berkowitz acquired 158,800 shares of this department stores chain, paying $39.59 per share for a total amount of $6.29 million.

We normally don’t include purchases by 10% owners or funds but decided to make an exception in this case to highlight Bruce Berkowitz’s continued purchases of Sears just as we did back in October 2014. We wrote back then that Mr. Berkowitz’s purchases remind me of Francis Chou’s purchases of Overstock.com (OSTK) back in 2011-2012 when the numbers didn’t look particularly attractive. You can read a profile of Mr. Chou in a Gurufocus.com article titled ‘The Investment Guru That You Never Heard Of‘.

Even as the core operations at Sears continue to deteriorate, Mr. Berkowitz appears to be confident in his investment thesis that the real estate assets of Sears are worth a whole lot more than the market is giving it credit for. He recently mentioned that they have a dedicated analyst solely covering the company and claims that “Sears Holding controls more square footage than any of the nation’s top mall REITs, yet its price, which is much lower by comparison, tells a different story.”

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 0.14 Price/Book: N/A EV/EBITDA: -9.31
Market Cap: $4.32B Avg. Daily Volume: 633,219 52 Week Range: $22.45 – $48.25

 

2. APIGEE CORP (APIC): $15.11

10% Owner Daniel S. Loeb acquired 300,000 shares of this API software platform company, paying $17 per share for a total amount of $5.1 million.

This seems to be a week of exceptions. We normally exclude IPO related purchases and purchases by 10% owners but decided to make an exception again because this purchase by hedge fund manager Dan Loeb of Third Point was interesting. IPOs present a liquidity event that allow existing investors to exit their position or reduce their holdings but in this case, Mr. Loeb decided to add to his position instead.

The company went public on April 24, 2015 at $17/share. After an initial pop to $20.50, the stock settled lower and has continued to lose ground in the ensuing days.

You can view the list of recent insider transactions for APIGEE CORP here.

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 0.97 Price/Book: 2.45 EV/EBITDA: N/A
Market Cap: $439.70M Avg. Daily Volume: 1,362,650 52 Week Range: $13.78 – $20.5

 

3. NexPoint Residential Trust, Inc (NXRT): $14.3

President James D. Dondero acquired 142,750 shares of this apartment REIT, paying $13.98 per share for a total amount of $1.99 million.

You can view the list of recent insider transactions for NexPoint Residential Trust, Inc 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: 165,581 52 Week Range: $12.9 – $15.5

 

4. Altisource Portfolio Solutions S.A. (ASPS): $26.94

Shares of this mortgage services company were acquired by 2 insiders:

  • Chief Executive Officer William B. Shepro acquired 35,000 shares, paying $25.93 per share for a total amount of $907,561.
  • Chief Administration Officer Kevin James Wilcox acquired 18,000 shares, paying $25.98 per share for a total amount of $467,580. Mr. Wilcox increased his stake by 84.78% to 39,232 shares with this purchase.

You can view the list of recent insider transactions for Altisource Portfolio Solutions S.A. here.

P/E: 4.73 Forward P/E: 5.99 Industry P/E: N/A
P/S: 0.45 Price/Book: 12.17 EV/EBITDA: 3.74
Market Cap: $542.36M Avg. Daily Volume: 627,111 52 Week Range: $12.28 – $122.25

 

5. General Electric Company (GE): $27.31

Shares of GE were acquired by 2 insiders:

  • Director Francisco D’souza acquired 36,500 shares, paying $27.26 per share for a total amount of $994,990.
  • Director Mary L. Schapiro acquired 7,000 shares, paying $27.22 per share for a total amount of $190,540. Ms. Schapiro increased his stake by 7000.00% to 7,100 shares with this purchase.

You can view the list of recent insider transactions for General Electric Company here.

P/E: N/A Forward P/E: 17.62 Industry P/E: N/A
P/S: 1.89 Price/Book: 2.51 EV/EBITDA: 26.08
Market Cap: $274.94B Avg. Daily Volume: 44,898,200 52 Week Range: $23.41 – $28.68

 

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

Notable Insider Sales:

1. The Charles Schwab Corporation (SCHW): $30.71

Shares of this investment brokerage were sold by 2 insiders:

  • Chairman Charles R. Schwab sold 1,047,300 shares for $30.23, generating $31.66 million from the sale.
  • President and CEO Walter W. Bettinger sold 100,000 shares for $30.75, generating $3.07 million from the sale.

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

P/E: 32.95 Forward P/E: 20.34 Industry P/E: N/A
P/S: 6.63 Price/Book: 3.66 EV/EBITDA: N/A
Market Cap: $40.32B Avg. Daily Volume: 6,749,960 52 Week Range: $23.35 – $31.73

 

2. Pfenex Inc. (PFNX): $12.74

Shares of this biotechnology company were sold by 2 insiders:

  • Director James C. Gale sold 1,907,767 shares for $14.57, generating $27.8 million from the sale.
  • Chief Executive Officer Bertrand C. Liang sold 5,000 shares for $13.49, generating $67,440 from the sale.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 25.74 Price/Book: 4.55 EV/EBITDA: -32.84
Market Cap: $261.46M Avg. Daily Volume: 225,029 52 Week Range: $5.28 – $19.95

 

3. Twitter, Inc. (TWTR): $37.84

Shares of Twitter were sold by 2 insiders:

  • Director Evan Clark Williams sold 468,000 shares for $51.38, generating $24.05 million from the sale.
  • Vice President of Product Kevin Weil sold 3,729 shares for $39.83, generating $148,513 from the sale.

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

Voluntary Disclosure: I hold a long position in Twitter.

P/E: N/A Forward P/E: 54.84 Industry P/E: N/A
P/S: 17.7 Price/Book: 6.85 EV/EBITDA: -89.5
Market Cap: $24.76B Avg. Daily Volume: 23,255,500 52 Week Range: $29.51 – $55.99

 

4. FireEye, Inc. (FEYE): $43.31

Shares of this security software company were sold by 2 insiders:

  • Chief Strategy Officer Ashar Aziz sold 188,434 shares for $44.08, generating $8.31 million from the sale.
  • SVP and General Counsel Alexa King sold 5,000 shares for $44.75, generating $223,750 from the sale.

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

P/E: N/A Forward P/E: N/A Industry P/E: N/A
P/S: 15.1 Price/Book: 5.05 EV/EBITDA: -16.93
Market Cap: $6.74B Avg. Daily Volume: 6,492,940 52 Week Range: $24.81 – $46.44

 

5. Red Hat, Inc. (RHT): $75.36

Shares of this open source software company were sold by 3 insiders:

  • Director William S. Kaiser sold 70,112 shares for $76.60, generating $5.37 million from the sale.
  • EVP, General Counsel Michael Cunningham sold 19,000 shares for $75.75, generating $1.44 million from the sale.
  • EVP, Global Sales & Service Arun Oberoi sold 15,000 shares for $75.35, generating $1.13 million from the sale.

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

P/E: 79.33 Forward P/E: 35.21 Industry P/E: N/A
P/S: 7.72 Price/Book: 10.72 EV/EBITDA: 40.92
Market Cap: $13.82B Avg. Daily Volume: 1,382,490 52 Week Range: $47.72 – $77.82

 

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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