September 21st, 2015
by Asif Suria
Insider buying increased significantly last week with insiders buying $281.51 million of stock compared to $48.28 million in the week prior. Selling also increased with insiders selling $501.83 million of stock last week compared to $273.36 million in the week prior. A large part of the increase in buying was driven by the biotech investors Baker Brothers increasing their stake in Seattle Genetics (SGEN).
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 1.78. In other words, insiders sold almost 2 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 5.7.
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 18, 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. Barnes & Noble, Inc. (BKS): $13.26
Shares of this bookseller were acquired by 2 insiders:
- Chairman of the Board Leonard Riggio acquired 1,000,000 shares, paying $12.59 per share for a total amount of $12.59 million. Mr. Riggio increased his stake by 13.17% to 8,594,491 shares with this purchase.
- Director Scott S. Cowen acquired 5,000 shares, paying $13.08 per share for a total amount of $65,381. Mr. Cowen increased his stake by 38.77% to 17,895 shares with this purchase.
This August, Barnes & Noble spun out Barnes & Noble Education (BNED) as a separate public company that operates college bookstores on 736 campuses nationwide. The company saw same store sales increase 1.8% in its fiscal first quarter ended August 1, 2015 and opened 21 new stores during the quarter but continues to remain unprofitable.
One of the reasons for a spin-off is to unlock value from an asset within the parent company. Unfortunately this has not been the case here with Barnes & Noble stock down more than 23% since the spin-off and Barnes & Noble Education down more than 2% since the spin-off.
You can view the list of recent insider transactions for Barnes & Noble, Inc. here.
|P/E: 602.73||Forward P/E: 19.5||Industry P/E: 21.51|
|P/S: 0.17||Price/Book: 0.75||EV/EBITDA: 3.06|
|Market Cap: $1.01B||Avg. Daily Volume: 1,742,170||52 Week Range: $11.45 – $19|
2. American Eagle Outfitters, Inc. (AEO): $16.16
Executive Chairman & Interim CEO Jay L. Schottenstein acquired 500,000 shares of this apparel chain, paying $15.74 per share for a total amount of $7.87 million. These shares were purchased indirectly by SEI, Inc.
You can view the list of recent insider transactions for American Eagle Outfitters, Inc. here.
|P/E: 23.7||Forward P/E: 14.43||Industry P/E: 20.75|
|P/S: 0.93||Price/Book: 2.73||EV/EBITDA: 6.56|
|Market Cap: $3.16B||Avg. Daily Volume: 5,277,030||52 Week Range: $11.77 – $18.49|
3. Hess Corporation (HES): $52.43
Chief Executive Officer John B. Hess acquired 143,900 shares of this integrated energy company, paying $52.27 per share for a total amount of $7.52 million. Mr. Hess increased his stake by 8.88% to 1,764,902 shares with this purchase. 29,010 of these shares were purchased indirectly through a trust.
You can view the list of recent insider transactions for Hess Corporation here.
|P/E: 344.93||Forward P/E: N/A||Industry P/E: 12.01|
|P/S: 1.78||Price/Book: 0.74||EV/EBITDA: 4.99|
|Market Cap: $15.05B||Avg. Daily Volume: 3,197,450||52 Week Range: $49.86 – $97.44|
4. Sears Holdings Corporation (SHLD): $25.38
Chief Executive Officer Edward S. Lampert acquired 213,124 shares of this department stores chain, paying $25.16 per share for a total amount of $5.36 million. Mr. Lampert increased his stake by 0.73% to 29,263,680 shares with this purchase. These shares were purchased indirectly by ESL Partners, L.P. and various other entities.
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: 19.66|
|P/S: 0.1||Price/Book: N/A||EV/EBITDA: -6.38|
|Market Cap: $2.71B||Avg. Daily Volume: 1,052,850||52 Week Range: $19.08 – $48.25|
5. Opko Health, Inc. (OPK): $10.48
Shares of this medical devices and drug development company were acquired by 2 insiders:
- CEO & Chairman Phillip Frost M.D. acquired 163,400 shares, paying $10.07 per share for a total amount of $1.64 million. These shares were acquired indirectly by Frost Gamma Investments Trust.
- Sr. Vice President, CFO Adam Logal acquired 1,000 shares, paying $9.95 per share for a total amount of $9,949. Mr. Logal increased his stake by 2.23% to 45,789 shares with this purchase.
You can view the list of recent insider transactions for Opko Health, Inc. here.
|P/E: N/A||Forward P/E: 209.6||Industry P/E: 27.5|
|P/S: 41.12||Price/Book: 5.8||EV/EBITDA: -48.36|
|Market Cap: $5.66B||Avg. Daily Volume: 5,201,320||52 Week Range: $8.02 – $19.2|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. ServiceNow, Inc. (NOW): $74.36
Shares of this software-as-a-service provider were sold by 2 insiders:
- Chief Product Officer Frederic B. Luddy sold 203,600 shares for $73.56, generating $14.98 million from the sale. These shares were sold indirectly through a trust.
- Chief Revenue Officer David Schneider sold 10,000 shares for $73.62, generating $736,225 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 ServiceNow, Inc. here.
|P/E: N/A||Forward P/E: 158.21||Industry P/E: 20.14|
|P/S: 13.94||Price/Book: 25.03||EV/EBITDA: -90.26|
|Market Cap: $11.61B||Avg. Daily Volume: 1,253,350||52 Week Range: $54.05 – $83.52|
2. HealthEquity, Inc. (HQY): $30.88
Shares of this provider of health savings accounts were sold by 3 insiders:
- Director Ian Sacks sold 150,000 shares for $29.93, generating $4.49 million from the sale.
- Director Michael O. Leavitt sold 135,000 shares for $30.05, generating $4.06 million from the sale. These shares were sold indirectly by Third Chapter, Inc.
- Founder and Vice Chairman Stephen Neeleman sold 50,000 shares for $30.06, generating $1.5 million 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 HealthEquity, Inc. here.
|P/E: 130.3||Forward P/E: 71.81||Industry P/E: 39.59|
|P/S: 16.73||Price/Book: 9.36||EV/EBITDA: 55.09|
|Market Cap: $1.77B||Avg. Daily Volume: 483,533||52 Week Range: $17.23 – $34.56|
3. Cheniere Energy, Inc. (LNG): $53.71
Shares of this natural gas storage and pipeline company were sold by 2 insiders:
- Chairman, CEO & President Charif Souki sold 150,000 shares for $54.24, generating $8.14 million from the sale. 100,000 of these shares were sold indirectly through a trust.
- Sr. VP and General Counsel Greg W. Rayford sold 12,000 shares for $54.40, generating $652,786 from the sale.
You can view the list of recent insider transactions for Cheniere Energy, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 24.59|
|P/S: 45.07||Price/Book: N/A||EV/EBITDA: -66.9|
|Market Cap: $12.71B||Avg. Daily Volume: 3,894,740||52 Week Range: $50.6 – $84.25|
4. OSI Systems, Inc. (OSIS): $78.36
Shares of this specialized electronic systems and components company were sold by 3 insiders:
- President and CEO Deepak Chopra sold 60,000 shares for $77.29, generating $4.64 million from the sale.
- Executive Vice President Ajay Mehra sold 33,279 shares for $78.10, generating $2.59 million from the sale. 12,419 of these shares were sold indirectly to satisfy tax withholding obligations and 9,000 shares were sold as a result of exercising options immediately prior to the sale.
- President, OSI Electronics Paul Keith Morben sold 2,956 shares for $78.84, generating $233,042 from the sale.
You can view the list of recent insider transactions for OSI Systems, Inc. here.
|P/E: 24.72||Forward P/E: 18.1||Industry P/E: 22.44|
|P/S: 1.61||Price/Book: 2.64||EV/EBITDA: 8.98|
|Market Cap: $1.55B||Avg. Daily Volume: 120,488||52 Week Range: $58.54 – $79.2|
5. UnitedHealth Group Incorporated (UNH): $122.47
Director Richard T. Burke sold 50,000 shares of this health insurance provider for $117.62, generating $5.88 million from the sale.
You can view the list of recent insider transactions for UnitedHealth Group Incorporated here.
|P/E: 19.48||Forward P/E: 16.66||Industry P/E: 25.13|
|P/S: 0.85||Price/Book: 3.55||EV/EBITDA: 9.88|
|Market Cap: $116.78B||Avg. Daily Volume: 4,427,380||52 Week Range: $80.72 – $126.21|
You can view the full list of sales from this Insider Sales page.