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posted on 25 October 2015

Insider Trading 23 October 2015: Six Flags, Schwab Selling

by Asif Suria

Insider buying increased last week with insiders buying $50.95 million of stock compared to $24.71 million in the week prior. Selling also increased with insiders selling $417.9 million of stock last week compared to $295.56 million in the week prior. Insider transactions are likely to stay muted over the next week or two as we get into the thick of earnings season.

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 down to 8.2. In other words, insiders sold more than 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 11.96.

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 October 23, 2015

Insider Sell Buy Ratio October 23, 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. Wynn Resorts Ltd. (WYNN): $67.6

Director Ray R. Irani acquired 40,000 shares of this resorts & casinos operator, paying $67.99 per share for a total amount of $2.72 million. Mr. Irani increased his stake by 575.46% to 46,951 shares with this purchase.

Wynn Resorts is down more than 63% over the last year as gambling activity declined in Las Vegas and dropped sharply in Macau. With revenue down 3.9% in Vegas and 37.9% in Macau, adjusted EBITDA was down 39% in the third quarter of 2015 when compared to the same quarter last year. Wynn Resorts generated nearly 60% of its $996.3 million in Q3 revenue from Macau. A Chinese government crackdown on corruption combined with slowing growth in China arecontributing to the decline in Macau operations for Wynn.

You can view the list of recent insider transactions for Wynn Resorts Ltd. here.

P/E: 35.23Forward P/E: 17.65Industry P/E: 18.95
P/S: 1.5Price/Book: N/AEV/EBITDA: 12.88
Market Cap: $6.86BAvg. Daily Volume: 4,589,20052 Week Range: $50.96 - $192.45

2. Opko Health, Inc. (OPK): $9.45

CEO & Chairman Phillip Frost M.D. acquired 31,800 shares of this medical devices and drug development company, paying $8.90 per share for a total amount of $283,101. These shares were purchased indirectly by Frost Gamma Investments Trust.

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

P/E: N/AForward P/E: 157.5Industry P/E: 23.81
P/S: 35.53Price/Book: 5.01EV/EBITDA: -44.93
Market Cap: $5.11BAvg. Daily Volume: 6,073,40052 Week Range: $8.08 - $19.2

3. Valeant Pharmaceuticals International, Inc. (VRX): $116.16

Director Ronald Harold Farmer acquired 1,500 shares of this Canadian pharmaceutical company, paying $181.60 per share for a total amount of $272,395. Mr. Farmer increased his stake by 10.69% to 15,532 shares with this purchase. The amounts mentioned in this transaction are in Canadian Dollars as the purchase was made on the Toronto Stock Exchange.

This purchase occurred as two transactions on October 21st, the day when the stock went for a wild ride and dropped more than 40% from a high of $148.66 to $88.50 before it was halted. The decline in Valeant stock was triggered by allegations by well known short-selling firm Citron Research that Valeant was creating "phantom sales" through speciality pharmacies and engaging in channel stuffing. Citron's research note titled "Valeant: Could this be the Pharmaceutical Enron?" certainly spooked investors as any reference to fraud and Enron is likely to do.

Valeant's response categorically denied Citron's allegations and the stock bounced back when it resumed trading. There are a number of players on both sides of this trade and for further color you can check out this Canadian fund manager's interview on BNN as well as Citron's founder calling Valeant's response amateurish on Bloomberg. Investors are anxiously awaiting Valeant's conference call scheduled on Monday to address Citron's allegations in more detail.

The stock was already under pressure over the last few months declining from a high of $263.81 on August 6 to current levels as a result of a federal investigation into the company for raising the prices of two of its drugs by 525 and 212 percent. These price increases came under increased scrutiny following the backlash suffered by Turing Pharmaceuticals when it shocked the nation by raising the price of a 62 year old drug by 5,000%.

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

P/E: 48.18Forward P/E: N/AIndustry P/E: N/A
P/S: 4.07Price/Book: 5.85EV/EBITDA: 19.98
Market Cap: $39.82BAvg. Daily Volume: 6,399,33052 Week Range: $88.5 - $263.81

4. Marriott Vacations Worldwide Corp. (VAC): $62.84

President & CEO Stephen P. Weisz acquired 4,000 shares of this vacation ownership resorts company, paying $62.43 per share for a total amount of $249,720. These shares were purchased indirectly by Mr. Weisz's spouse.

You can view the list of recent insider transactions for Marriott Vacations Worldwide Corp. here.

P/E: 22.8Forward P/E: 15.75Industry P/E: 18.95
P/S: 1.41Price/Book: 1.9EV/EBITDA: 9.83
Market Cap: $1.95BAvg. Daily Volume: 272,36852 Week Range: $60.28 - $93.4

5. Arctic Cat Inc. (ACAT): $19.9

Shares of this recreational vehicles company were acquired by 3 insiders:

  • President and CEO Christopher T. Metz acquired 7,500 shares, paying $16.96 per share for a total amount of $127,200. Mr. Metz increased his stake by 10.76% to 77,201 shares with this purchase.

  • Chief Financial Officer Christopher J. Eperjesy acquired 4,000 shares, paying $18.05 per share for a total amount of $72,204. Mr. Eperjesy increased his stake by 34.51% to 15,591 shares with this purchase.

  • Director D Christian Koch acquired 1,500 shares, paying $18.93 per share for a total amount of $28,401. Mr. Koch increased his stake by 20.94% to 8,663 shares with this purchase.

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

P/E: 865.22Forward P/E: 14.21Industry P/E: 24.23
P/S: 0.31Price/Book: 1.2EV/EBITDA: 25.3
Market Cap: $258.39MAvg. Daily Volume: 199,51252 Week Range: $16.6 - $39.72

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

Notable Insider Sales:

1. Six Flags Entertainment Corporation (SIX): $52.59

Shares of this theme park operator were sold by 2 insiders:

  • Chairman, President & CEO James Reid-Anderson sold 300,000 shares for $52.05, generating $15.62 million from the sale.

  • Senior VP - Marketing Brett Petit sold 18,704 shares for $50.00, generating $935,200 from the sale. 16,750 of 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 Six Flags Entertainment Corporation here.

P/E: 77Forward P/E: 30.05Industry P/E: N/A
P/S: 4.16Price/Book: 36.69EV/EBITDA: 18.18
Market Cap: $4.98BAvg. Daily Volume: 760,86052 Week Range: $38.88 - $53

2. The Charles Schwab Corporation (SCHW): $30.43

Chairman Charles R. Schwab sold 350,000 shares of this investment brokerage for $28.92, generating $10.12 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: 30.74Forward P/E: 22.71Industry P/E: 13.33
P/S: 6.25Price/Book: 3.35EV/EBITDA: N/A
Market Cap: $40.03BAvg. Daily Volume: 10,308,40052 Week Range: $25.43 - $35.72

3. Cubic Corporation (CUB): $44.98

Exec. Chairman of the Board Walter C. Zable sold 185,513 shares of this provider of transportation and defense systems for $44.25, generating $8.21 million from the sale.

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

P/E: 33.82Forward P/E: 17.57Industry P/E: 19.33
P/S: 0.85Price/Book: 1.55EV/EBITDA: 9.24
Market Cap: $1.21BAvg. Daily Volume: 154,94352 Week Range: $39.83 - $55.73

4. FireEye, Inc. (FEYE): $27.23

Chief Strategy Officer Ashar Aziz sold 188,434 shares of this security software company for $29.19, generating $5.5 million from the sale.

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

P/E: N/AForward P/E: N/AIndustry P/E: 33.95
P/S: 8.84Price/Book: 3.87EV/EBITDA: -11.2
Market Cap: $4.34BAvg. Daily Volume: 5,402,81052 Week Range: $26.73 - $55.33

5. salesforce.com, inc. (CRM): $78.56

Shares of this software-as-a-service (SaaS) provider were sold by 3 insiders:

  • Chairman of the Board & CEO Marc Benioff sold 62,500 shares for $77.57, generating $4.85 million from the sale.

  • Co-Founder Parker Harris sold 5,000 shares for $77.54, generating $387,718 from the sale.

  • Pres., Sales & Cust. Success Maria Martinez sold 2,347 shares for $78.44, generating $184,099 from the sale.

You can view the list of recent insider transactions for salesforce.com, inc. here.

P/E: N/AForward P/E: 81.83Industry P/E: 33.95
P/S: 8.55Price/Book: 11.26EV/EBITDA: 167.29
Market Cap: $51.50BAvg. Daily Volume: 3,963,18052 Week Range: $53.44 - $79.38

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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