Insider Trading 04 September 2015: Insider Activity Is Usually Muted Ahead of Earnings Releases

September 7th, 2015
in contributors

by Asif Suria

Insider buying declined sharply last week with insiders buying $39.54 million of stock compared to $170.5 million in the week prior. Selling also declined with insiders selling $508.05 million of stock last week compared to $899.89 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 increased to 12.85. In other words, insiders sold almost 13 times as much stock as they purchased.

Follow up:

The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 5.28. Most of this decline in insider activity probably had to do with the start of a new quarter when insider activity is usually muted ahead of earnings releases. 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 September 4, 2015

Insider Sell Buy Ratio September 4, 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. Dollar General Corporation (DG): $72.56

Shares of this discount store chain were acquired by 2 insiders:

  • Director Michael M. Calbert acquired 38,000 shares, paying $72.47 per share for a total amount of $2.75 million. Mr. Calbert increased his stake by 221.20% to 55,179 shares with this purchase.
  • Director William C. Rhodes III acquired 5,000 shares, paying $73.98 per share for a total amount of $369,897. These shares were purchased indirectly through a trust.

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

P/E: 19.39 Forward P/E: 15.88 Industry P/E: 30.36
P/S: 1.08 Price/Book: 3.92 EV/EBITDA: 10.8
Market Cap: $21.38B Avg. Daily Volume: 2,683,620 52 Week Range: $57.09 – $81.42

 

2. NuStar GP Holdings, LLC (NSH): $32.23

Director William E. Greehey acquired 70,097 shares of this oil & gas pipelines company, paying $33.57 per share for a total amount of $2.35 million. Mr. Greehey increased his stake by 0.83% to 8,549,324 shares with this purchase.

You can view the list of recent insider transactions for NuStar GP Holdings, LLC here.

P/E: 18.58 Forward P/E: 17.24 Industry P/E: 24.59
P/S: 17.69 Price/Book: 4.5 EV/EBITDA: N/A
Market Cap: $1.38B Avg. Daily Volume: 147,135 52 Week Range: $29.74 – $44.07

 

3. New Senior Investment Group Inc. (SNR): $11.21

Director Wesley R. Edens acquired 200,000 shares of this senior facilities REIT, paying $11.36 per share for a total amount of $2.27 million. These shares were purchased indirectly through a trust.

This is an interesting REIT with an unusually high dividend yield of 9.6% that was spun out of another REIT called Newcastle Investment Corp. (NCT) late last year. After hitting a high of over $20 during the first few days of trading, the stock has been in a steady decline since. A secondary offering priced at $13.75/share in June of this year certainly didn’t help matters. There are very few companies like Tesla Motors (TSLA) that can get away with several rounds of stock offerings and still see their price levitate.

You can view the list of recent insider transactions for New Senior Investment Group Inc. here.

P/E: N/A Forward P/E: 7.14 Industry P/E: N/A
P/S: 3.24 Price/Book: 1.17 EV/EBITDA: 18.45
Market Cap: $970.05M Avg. Daily Volume: 1,139,040 52 Week Range: $10.67 – $20.2

 

4. FMC Corp. (FMC): $41.48

Shares of this diversified chemical company were acquired by 5 insiders:

  • Director G. Peter D’Aloia acquired 15,000 shares, paying $40.95 per share for a total amount of $614,250. Mr. Daloia increased his stake by 47.21% to 46,771 shares with this purchase.
  • Director Vincent R. Volpe acquired 12,200 shares, paying $40.94 per share for a total amount of $499,505. Mr. Volpe increased his stake by 39.89% to 42,784 shares with this purchase.
  • Director Paul J. Norris acquired 7,000 shares, paying $41.02 per share for a total amount of $287,140. Mr. Norris increased his stake by 15.99% to 50,780 shares with this purchase.
  • Director Robert C. Pallash acquired 3,680 shares, paying $41.52 per share for a total amount of $152,794. Mr. Pallash increased his stake by 12.48% to 33,173 shares with this purchase.
  • Director Dirk A. Kempthorne acquired 485 shares, paying $40.97 per share for a total amount of $19,873. Mr. Kempthorne increased his stake by 2.21% to 22,391 shares with this purchase.

You can view the list of recent insider transactions for FMC Corp. here.

P/E: 6.69 Forward P/E: 10.45 Industry P/E: 16.45
P/S: 1.4 Price/Book: 2.61 EV/EBITDA: 9.28
Market Cap: $5.54B Avg. Daily Volume: 1,014,080 52 Week Range: $39.45 – $66.65

 

5. Fortress Investment Group LLC (FIG): $5.39

Principal Wesley R. Edens acquired 200,000 shares of this investment management company, paying $6.06 per share for a total amount of $1.21 million.

You can view the list of recent insider transactions for Fortress Investment Group LLC here.

P/E: 11.4 Forward P/E: 5.86 Industry P/E: 15.13
P/S: 0.75 Price/Book: 2 EV/EBITDA: 3.38
Market Cap: $1.16B Avg. Daily Volume: 783,162 52 Week Range: $4.16 – $8.65

 

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

Notable Insider Sales:

1. Super Micro Computer, Inc. (SMCI): $24.24

Shares of this high performance server solutions provider were sold by 2 insiders:

  • President and CEO Charles Liang sold 97,735 shares for $25.50, generating $2.49 million from the sale.
  • VP Worldwide Sales Cheng-hsien Phidias Chou sold 4,000 shares for $26.95, generating $107,786 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 Super Micro Computer, Inc. here.

P/E: 11.94 Forward P/E: 8.69 Industry P/E: 19.54
P/S: 0.59 Price/Book: 1.9 EV/EBITDA: 7.59
Market Cap: $1.15B Avg. Daily Volume: 655,720 52 Week Range: $21.5 – $42

 

2. Liberty Interactive Corporation (QVCA): $27.27

Chairman of the Board John C. Malone sold 128,000 shares of this online commerce company for $29.53, generating $3.78 million from the sale.

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

P/E: 23.03 Forward P/E: 18.06 Industry P/E: 51.24
P/S: 1.27 Price/Book: 2.27 EV/EBITDA: 9.87
Market Cap: $12.57B Avg. Daily Volume: 2,170,830 52 Week Range: $22.37 – $31.62

 

3. DexCom, Inc. (DXCM): $88.31

Shares of this medical devices company were sold by 3 insiders:

  • CTO Jorge A. Valdes sold 20,000 shares for $91.22, generating $1.82 million from the sale.These shares were sold as a result of exercising options immediately prior to the sale.
  • EVP, Strategy & Corp. Dev. Steven Robert Pacelli sold 19,854 shares for $94.67, generating $1.88 million from the sale.
  • SVP, Operations Jeffrey Moy sold 8,881 shares for $90.61, generating $804,683 from the sale. These shares were sold indirectly through a trust.

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

P/E: N/A Forward P/E: 267.61 Industry P/E: 31.12
P/S: 22.07 Price/Book: 41.24 EV/EBITDA: -675.14
Market Cap: $7.07B Avg. Daily Volume: 1,056,950 52 Week Range: $38.77 – $98.85

 

4. Liberty Media Corporation (LMCA): $37.07

Chairman of the Board John C. Malone sold 104,000 shares of this broadcasting company for $35.98, generating $3.74 million from the sale.

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

P/E: 86.01 Forward P/E: 35.64 Industry P/E: 19.34
P/S: 2.75 Price/Book: 1.14 EV/EBITDA: 13.74
Market Cap: $12.44B Avg. Daily Volume: 1,044,780 52 Week Range: $31.04 – $40.5

 

5. Discover Financial Services (DFS): $51.4

Shares of this credit card company were sold by 5 insiders:

  • Chairman & CEO David W. Nelms sold 30,000 shares for $52.13, generating $1.56 million from the sale.
  • President & COO Roger C. Hochschild sold 20,000 shares for $52.08, generating $1.04 million from the sale.
  • EVP Diane E. Offereins sold 9,000 shares for $51.81, generating $466,245 from the sale.
  • EVP Carlos Minetti sold 8,000 shares for $52.24, generating $417,920 from the sale.
  • EVP, GC & Secretary Kathryn McNamara Corley sold 4,000 shares for $52.08, generating $208,300 from the sale.

You can view the list of recent insider transactions for Discover Financial Services here.

P/E: 10.62 Forward P/E: 8.97 Industry P/E: 14.34
P/S: 3.22 Price/Book: 2.13 EV/EBITDA: N/A
Market Cap: $22.37B Avg. Daily Volume: 3,557,900 52 Week Range: $50.92 – $66.75

 

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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