posted on 01 May 2016
by Asif Suria
Insider buying increased significantly last week with insiders buying $120.89 million of stock compared to $8.03 million in the week prior. Selling was flat with insiders selling $596.16 million of stock last week compared to $596.17 million in the week prior.
Over 85% of the insider buying this week was driven by a cluster of insider purchases in United Continental Holdings (UAL) as discussed below.
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 4.93. In other words, insiders sold almost 5 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 74.28. 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 April 29, 2016
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. United Continental Holdings, Inc. (UAL): $45.81
Shares of this airline were acquired by 12 insiders:
These purchases follow the $1 million purchase by the CEO Oscar Munoz that we reported on last week. Mr. Munoz is back from a medical leave as a result of a heart attack less than two months after he took the CEO job last year. It appears that he is well liked within the company as seen by the picketing by 30 pilots in front of the offices of the investment manager PAR Capital Management to support their CEO and his vision to turn around the company.
United Continental is certainly in need of significant turning around as discussed in the Bloomberg Businessweek article United's Quest To Be Less Awful. While the stock is up over 78% over the last five years, it significantly trails its peers as seen in the chart below. Over the last year, the stock is down 25% even as the favorable tail winds of low oil prices, a growing economy and additional revenue from fees have helped the entire airline industry enjoy a new golden age. The stock is cheap but unloved. So are many other old guard companies like General Motors (GM) and IBM that offer respectable dividends while their investors wait to see if they turn around.
United Continental's 5 Year Stock Chart (click to enlarge)
You can view the list of recent insider transactions for United Continental Holdings, Inc. here.
2. Caterpillar Inc. (CAT): $77.72
Director David L. Calhoun acquired 25,000 shares of this heavy equipment manufacturer, paying $77.44 per share for a total amount of $1.94 million. Mr. Calhoun increased his stake by 307.54% to 33,129 shares with this purchase.
You can view the list of recent insider transactions for Caterpillar Inc. here.
3. Mylan N.V. (MYL): $41.71
Director Melina E. Higgins acquired 35,000 shares of this pharmaceutical company, paying $42.92 per share for a total amount of $1.5 million. These shares were purchased indirectly by Ms. Higgins's husband.
You can view the list of recent insider transactions for Mylan N.V. here.
4. Performance Sports Group Ltd. (PSG): $3.71
Shares of this sports equipment company were acquired by 2 insiders:
You can view the list of recent insider transactions for Performance Sports Group Ltd. here.
5. Acacia Research Corporation (ACTG): $4.82
Shares of this patent portfolio company were acquired by 3 insiders:
You can view the list of recent insider transactions for Acacia Research Corporation here.
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Fortune Brands Home & Security, Inc. (FBHS): $55.41
Shares of this home and security products company were sold by 2 insiders:
You can view the list of recent insider transactions for Fortune Brands Home & Security, Inc. here.
2. Lockheed Martin Corporation (LMT): $232.38
Shares of this defense company were sold by 2 insiders:
You can view the list of recent insider transactions for Lockheed Martin Corporation here.
3. QVC Group (QVCA): $26.2
Director Mark C. Vadon sold 366,000 shares of this online commerce company for $26.73, generating $9.78 million from the sale. These shares were sold indirectly by Lake Tana LLC.
You can view the list of recent insider transactions for QVC Group here.
4. Wells Fargo & Company (WFC): $49.98
Shares of this bank were sold by 3 insiders:
You can view the list of recent insider transactions for Wells Fargo & Company here.
5. Philip Morris International, Inc. (PM): $98.12
Shares of this cigarettes company were sold by 2 insiders:
You can view the list of recent insider transactions for Philip Morris International, Inc. here.
You can view the full list of sales from this Insider Sales page.
Disclaimer Clients of Signal Partners, LLC and I may have positions in any of these stocks at any time. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.
>>>>> Scroll down to view and make comments <<<<<<
This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved