Insider Trading 29 May 2015: VMware, Applied Materials, CBS Selling

May 31st, 2015
in contributors

by Asif Suria

Insider buying decreased last week with insiders buying $43.19 million of stock compared to $86.26 million in the week prior. Selling also decreased with insiders selling $2.08 billion of stock last week compared to $3.19 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 went up to 48.14. In other words, insiders sold more than 48 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 36.93.

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 29, 2015

Insider Sell Buy Ratio May 29, 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. First Foundation Inc. (FFWM): $18.84

Shares of this regional bank were acquired by 2 insiders:

  • President FFB David S. Depillo acquired 272,035 shares, paying $18.38 per share for a total amount of $5 million. These shares were purchased indirectly through a trust.
  • Director Warren D. Fix acquired 1,000 shares, paying $18.92 per share for a total amount of $18,920. These shares were purchased indirectly through a trust.

We are all used to seeing companies offer lucrative pay packages to key new employees that include generous stock grants but the agreement between Mr. Depillo and First Foundation is unusual to say the least. Mr. Depillo joined the company earlier this month as President of First Foundation Bank following a one-year stint at Oregon based regional bank Umpqua Holdings (UMPQ). As you can see from this 8-K filing, he received the usual base salary, participation in an incentive plan and restricted stock units (RSUs).

The unusual part is that according to a press release issued by the company yesterday, “it has sold a total of 272,035 shares of its common stock, at a price of $18.38 per share in cash, to David S. DePillo as an inducement to him to join the Company as President of First Foundation Bank, the Company’s wholly-owned banking subsidiary.”

The price is just a 2.65% discount to the closing price on May 27 (the date of purchase according to the form 4 filing) and so the “inducement” was just the ability to buy a large block of stock close to market price. Trading at 1.44 tangible book value and with a low troubled assets ratio of 3.10, I can begin to see why Mr. Depillo wanted to buy these shares.

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

P/E: 16.12 Forward P/E: N/A Industry P/E: N/A
P/S: 2.13 Price/Book: 1.44 EV/EBITDA: N/A
Market Cap: $148.59M Avg. Daily Volume: 4,781 52 Week Range: $17.5 – $23

 

2. Martin Marietta Materials Inc. (MLM): $149.01

Director Stephen P. Zelnak Jr. acquired 16,150 shares of this heavy building materials provider, paying $151.07 per share for a total amount of $2.44 million. Mr. Zelnak increased his stake by 75.12% to 37,649 shares with this purchase.

You can view the list of recent insider transactions for Martin Marietta Materials Inc. here.

P/E: 51.35 Forward P/E: 19.58 Industry P/E: 24.4
P/S: 3.48 Price/Book: 2.35 EV/EBITDA: 18.13
Market Cap: $10.06B Avg. Daily Volume: 754,908 52 Week Range: $103.09 – $155.98

 

3. Sotheby’s (BID): $44.83

Director John M. Angelo acquired 52,250 shares of this auctioneer, paying $44.46 per share for a total amount of $2.32 million. Mr. Angelo increased his stake by 44.58% to 169,450 shares with this purchase.

You can view the list of recent insider transactions for Sotheby’s here.

P/E: 24.42 Forward P/E: 16.42 Industry P/E: 22.86
P/S: 3.3 Price/Book: 3.61 EV/EBITDA: 12.42
Market Cap: $3.12B Avg. Daily Volume: 751,346 52 Week Range: $34.74 – $45.68

 

4. Valeant Pharmaceuticals International, Inc. (VRX): $238.77

Director Anne Clem Whitaker acquired 7,500 shares of this Canadian pharmaceutical company, paying $234.67 per share for a total amount of $1.76 million.

Ms. Whitaker joined Valeant as Executive Vice President and Company Group Chairman last month. Since new directors often tend to buy stock of the company they joined, I would not read much into this purchase.

You can view the list of recent insider transactions for Valeant Pharmaceuticals International, Inc. here.

P/E: 81.44 Forward P/E: N/A Industry P/E: 23.14
P/S: 9.67 Price/Book: 12.82 EV/EBITDA: 26.11
Market Cap: $81.77B Avg. Daily Volume: 2,236,550 52 Week Range: $106 – $246.01

 

5. NuVasive, Inc. (NUVA): $50.55

Chairman & CEO Gregory T. Lucier acquired 34,000 shares of this medical device company, paying $49.25 per share for a total amount of $1.67 million. These shares were purchased indirectly through a trust.

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

P/E: 73.69 Forward P/E: 37.17 Industry P/E: 27.87
P/S: 3.09 Price/Book: 3.66 EV/EBITDA: 18.05
Market Cap: $2.44B Avg. Daily Volume: 729,575 52 Week Range: $32.04 – $51.25

 

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

Notable Insider Sales:

1. VMware, Inc. (VMW): $87.32

Director Paul Maritz sold 271,757 shares of this virtualization software company for $87.35, generating $23.74 million from the sale.

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

P/E: 42.99 Forward P/E: 19.28 Industry P/E: 30.44
P/S: 5.97 Price/Book: 4.96 EV/EBITDA: 20.08
Market Cap: $37.01B Avg. Daily Volume: 1,428,240 52 Week Range: $73.65 – $103.86

 

2. Applied Materials, Inc. (AMAT): $20.13

Director Michael R. Splinter sold 1,000,000 shares of this semiconductor equipment and services provider for $20.18, generating $20.18 million from the sale. 300,000 of these shares were sold indirectly through a trust.

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

P/E: 19.74 Forward P/E: 13.51 Industry P/E: 19.96
P/S: 2.69 Price/Book: 3 EV/EBITDA: 12.31
Market Cap: $24.73B Avg. Daily Volume: 22,557,200 52 Week Range: $18.63 – $25.71

 

3. Take-Two Interactive Software Inc. (TTWO): $27.37

Shares of this videogame company were sold by 6 insiders:

  • Chairman and CEO Strauss Zelnick sold 304,770 shares for $27.39, generating $8.35 million from the sale.
  • Director Jon J. Moses sold 69,520 shares for $27.36, generating $1.9 million from the sale.
  • President Karl Slatoff sold 39,896 shares for $27.39, generating $1.09 million from the sale.
  • Chief Financial Officer Lainie Goldstein sold 12,456 shares for $27.40, generating $341,278 from the sale.
  • Exec. VP and General Counsel Daniel P. Emerson sold 2,615 shares for $27.40, generating $71,664 from the sale.
  • Director Michael Sheresky sold 826 shares for $27.50, generating $22,715 from the sale.

You can view the list of recent insider transactions for Take-Two Interactive Software Inc. here.

P/E: N/A Forward P/E: 16.01 Industry P/E: 23.52
P/S: 2.07 Price/Book: 3.98 EV/EBITDA: -6.84
Market Cap: $2.31B Avg. Daily Volume: 2,102,120 52 Week Range: $19.25 – $30.8

 

4. CBS Corporation (CBS): $61.72

Shares of this media company were sold by two insiders:

  • President and CEO Leslie Moonves sold 315,216 shares for $61.87, generating $19.5 million.
  • Director Joseph A. Califano sold 5,093 shares for $61.64, generating $313,933. 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 CBS Corporation here.

P/E: 11.5 Forward P/E: N/A Industry P/E: 23.78
P/S: 2.22 Price/Book: 4.8 EV/EBITDA: 11.99
Market Cap: $30.38B Avg. Daily Volume: 4,350,990 52 Week Range: $48.83 – $65.24

 

5. Ormat Technologies Inc. (ORA): $37.1

Shares of this electric utility company were sold by 3 insiders:

  • Director Yehudit Bronicki sold 240,000 shares for $37.24, generating $8.94 million from the sale. These shares were sold indirectly by Bronicki Investments.
  • Director David Granot sold 3,750 shares for $38.00, generating $142,500 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • SVP, Corporate Secretary Etty Rosner sold 2,586 shares for $37.72, generating $97,544 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 Ormat Technologies Inc. here.

P/E: 40.28 Forward P/E: 21.95 Industry P/E: 16.6
P/S: 3.38 Price/Book: 2.25 EV/EBITDA: 11.44
Market Cap: $1.81B Avg. Daily Volume: 175,592 52 Week Range: $24.15 – $39.42

 

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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