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posted on 05 June 2016

Insider Trading 03 June 2016: Insiders Continued Buying In May At A Pace That Exceeded What We Have Seen In May Over The Last Three Years

by Asif Suria

Insider buying increased last week with insiders buying $150.44 million of stock compared to $88.99 million in the week prior. Selling dropped nearly in half with insiders selling $1.15 billion of stock last week compared to $2.28 billion in the week prior.

Even as the S&P 500 flirts with its all time high and several widely followed market commentators are bearish about the market, insiders continued buying in May at a pace that exceeded what we have seen in May over the last three years. It was also interesting to see that there were several repeat purchases. Two out of the top 5 purchases this week (FDC and TICC) also made the top 5 list last week and insiders of the business development company TICC made the list for the third week in a row.

There were several interesting purchases this week that did not make the list of top 5 purchases including a $1.11 million purchase by the CEO of helicopter transportation company PHI Inc (PHII), a $1 million purchase by the CEO of data storage solutions provider Western Digital (WDC), purchases by two insiders of the car rental company Hertz (HTZ) and a purchase by the SVP of Finance of the mattress manufacturer Tempur Sealy International (TPX).

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 7.67. In other words, insiders sold almost 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 25.62. 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 June 3, 2016

Insider Sell Buy Ratio June 3, 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. Endurance Specialty Holdings Ltd. (ENH): $68.77

Chairman & Chief Executive Officer John Charman acquired 290,000 shares of this insurance company, paying $68.17 per share for a total amount of $19.77 million.

You can view the list of recent insider transactions for Endurance Specialty Holdings Ltd. here.

P/E: 12.98Forward P/E: 10.55Industry P/E: 12.79
P/S: 2.09Price/Book: 0.93EV/EBITDA: 3.6
Market Cap: $4.63BAvg. Daily Volume: 290,77252 Week Range: $57.97 - $70.5

2. OvaScience, Inc. (OVAS): $6.98

Chief Executive Officer Michelle Dipp acquired 425,000 shares of this biotech company, paying $7.00 per share for a total amount of $2.98 million. These shares were purchased indirectly by Longwood Fund III LP.

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

P/E: N/AForward P/E: N/AIndustry P/E: N/A
P/S: 494.32Price/Book: 1.85EV/EBITDA: -1.08
Market Cap: $240.52MAvg. Daily Volume: 550,18352 Week Range: $4.53 - $39.29

3. TICC Capital Corp. (TICC): $5.66

Shares of this business development company were acquired by 3 insiders:

  • President and COO Saul B. Rosenthal acquired 249,720 shares, paying $5.64 per share for a total amount of $1.41 million. Mr. Rosenthal increased his stake by 64.72% to 635,595 shares with this purchase.

  • Chief Executive Officer Jonathan H. Cohen acquired 249,640 shares, paying $5.64 per share for a total amount of $1.41 million. Mr. Cohen increased his stake by 42.40% to 838,458 shares with this purchase.

  • Director Charles M. Royce acquired 124,860 shares, paying $5.64 per share for a total amount of $704,406. Mr. Royce increased his stake by 49.02% to 379,586 shares with this purchase.

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

P/E: N/AForward P/E: 12.04Industry P/E: 24.22
P/S: 3.56Price/Book: 0.95EV/EBITDA: N/A
Market Cap: $291.37MAvg. Daily Volume: 237,82252 Week Range: $4.16 - $7.19

4. First Data Corporation (FDC): $12.32

Director Joseph J. Plumeri acquired 250,000 shares of this electronic commerce solutions provider, paying $12.44 per share for a total amount of $3.11 million. Mr. Plumeri increased his stake by 52.23% to 728,664 shares with this purchase.

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

P/E: N/AForward P/E: 8.11Industry P/E: N/A
P/S: 1.47Price/Book: 18.39EV/EBITDA: 12.94
Market Cap: $11.18BAvg. Daily Volume: 4,607,69052 Week Range: $8.37 - $17.99

5. PBF Energy Inc. (PBF): $26.82

Shares of this oil refining company were acquired by 2 insiders:

  • Chief Executive Officer Thomas J. Nimbley acquired 50,000 shares, paying $27.40 per share for a total amount of $1.37 million. Mr. Nimbley increased his stake by 83.33% to 110,000 shares with this purchase.

  • President Matthew C. Lucey acquired 10,000 shares, paying $27.50 per share for a total amount of $275,000. Mr. Lucey increased his stake by 25.00% to 50,000 shares with this purchase.

You can view the list of recent insider transactions for PBF Energy Inc. here.

P/E: 82.52Forward P/E: 6.05Industry P/E: 10.52
P/S: 0.21Price/Book: 1.69EV/EBITDA: 5.37
Market Cap: $2.62BAvg. Daily Volume: 1,518,47052 Week Range: $25.6 - $41.75

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $118.47

Shares of Facebook were sold by 4 insiders:

  • Director Jan Koum sold 1,721,436 shares for $118.80, generating $204.51 million from the sale. These shares were sold indirectly through a trust.

  • Chief Technology Officer Michael Todd Schroepfer sold 20,000 shares for $118.45, generating $2.37 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

  • Chief Product Officer Christopher K. Cox sold 15,600 shares for $119.00, generating $1.86 million from the sale.

  • Chief Financial Officer David M. Wehner sold 5,265 shares for $119.90, generating $631,274 from the sale.

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

P/E: 72.46Forward P/E: 25.87Industry P/E: 28.1
P/S: 17.21Price/Book: 7.19EV/EBITDA: 33.73
Market Cap: $338.86BAvg. Daily Volume: 26,438,60052 Week Range: $72 - $121.08

2. Apple Inc. (AAPL): $97.92

Shares of Apple were sold by 4 insiders:

  • Senior Vice President Angela J. Ahrendts sold 75,000 shares for $100.00, generating $7.5 million from the sale.

  • Senior Vice President Eduardo H. Cue sold 50,000 shares for $99.44, generating $4.97 million from the sale. These shares were sold indirectly through a trust.

  • Senior Vice President Daniel J. Riccio sold 40,755 shares for $100.00, generating $4.08 million from the sale.

  • Senior Vice President Johny Srouji sold 8,000 shares for $99.75, generating $798,000 from the sale.

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

P/E: 10.9Forward P/E: 10.75Industry P/E: 15.4
P/S: 2.35Price/Book: 4.1EV/EBITDA: 7.14
Market Cap: $536.35BAvg. Daily Volume: 39,000,00052 Week Range: $89.47 - $132.97

3. Fitbit Inc. (FIT): $14.63

Director Steven Joseph Murray sold 1,000,000 shares of this health and fitness tracking devices provider for $14.20, generating $14.21 million from the sale. These shares were sold indirectly by Softbank PrinceVille Investments.

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

P/E: 25.4Forward P/E: 10.38Industry P/E: 24.58
P/S: 1.59Price/Book: 3.17EV/EBITDA: 8.32
Market Cap: $3.01BAvg. Daily Volume: 9,213,41052 Week Range: $11.91 - $51.9

4. Masimo Corporation (MASI): $49.94

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

  • CEO and Chairman of the Board Joe E. Kiani sold 234,952 shares for $50.09, generating $11.77 million from the sale.

  • EVP & Chief Financial Officer Mark de Raad sold 40,000 shares for $49.43, generating $1.98 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

  • Pres-WW Sales,Pro Svc,Med Affs Jon Coleman sold 4,000 shares for $50.00, generating $200,000 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 Masimo Corporation here.

P/E: 29.43Forward P/E: 24.6Industry P/E: N/A
P/S: 3.84Price/Book: 9.16EV/EBITDA: 20.03
Market Cap: $2.45BAvg. Daily Volume: 337,18452 Week Range: $33.03 - $50.41

5. Best Buy Co., Inc. (BBY): $32.35

Shares of Best Buy were sold by 2 insiders:

  • Chairman & CEO Hubert Joly sold 398,000 shares for $32.24, generating $12.83 million from the sale.

  • VP, Finance - Contr. & CAO Mathew Watson sold 1,363 shares for $32.10, generating $43,751 from the sale.

You can view the list of recent insider transactions for Best Buy Co., Inc. here.

P/E: 11.12Forward P/E: 10.47Industry P/E: 12.5
P/S: 0.27Price/Book: 2.37EV/EBITDA: 3.62
Market Cap: $10.48BAvg. Daily Volume: 4,696,66052 Week Range: $25.31 - $39.1

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.

Connect with me on LinkedIn: http://www.linkedin.com/in/asifsuria or follow me on Twitter @asifsuria

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