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posted on 13 August 2016

Insider Trading 12 August 2016: Netflix Buying, Facebook Selling

by Asif Suria

Insider buying increased last week with insiders buying $100.55 million of stock compared to $78.59 million in the week prior. Selling declined with insiders selling $1.91 billion of stock last week compared to $2.12 billion 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 decreased to 19.04. In other words, insiders sold more than 19 times as much stock as they purchased.The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 26.92. 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 August 12, 2016

Insider Sell Buy Ratio August 12, 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. Netflix, Inc. (NFLX): $96.59

Director Jay C. Hoag acquired 300,000 shares of Netflix, paying $94.31 per share for a total amount of $28.29 million. These shares were purchased indirectly through various Technology Crossover Ventures (TCV) funds.

We normally exclude transactions by funds and venture capital firms but decided to make an exception just liked we did two weeks ago because of Mr. Hoag's history of insider purchases. We wrote the following after his earlier purchases of Netflix,

"TCV is a well known venture capital company that mostly invests in private companies but sometimes ventures into public markets. The company first invested in Netflix (NFLX) back in 1999 and Mr. Hoag's purchase of Netflix shares in May 2012 at prices in the low $70′s (pre-split) were one of the best instances of insider purchases I have seen since I started tracking this data more than 5 years ago. Netflix shares had dropped dramatically before Mr. Hoag's purchases on news that the company was going to split itself a DVD mailing service called Qwikster and a streaming service. Much to the relief of investors, the company eventually abandoned that plan and the stock eventually went up 10 fold. Unfortunately for TCV, they did not hold through that entire 1,000%+ increase.

We also reported on Mr. Hoag's purchases of Zillow (Z) earlier this year on behalf of TCV at an average price of $19.98. The stock has almost doubled since his purchase five months ago."

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

P/E: 301.84Forward P/E: 108.53Industry P/E: 36.96
P/S: 5.39Price/Book: 17.02EV/EBITDA: 133.67
Market Cap: $41.41BAvg. Daily Volume: 12,376,20052 Week Range: $79.95 - $133.27

2. Western Refining, Inc. (WNR): $24.1

Chairman of BOD, Exec. Chair Paul L. Foster acquired 325,000 shares of this oil and gas pipelines company, paying $23.59 per share for a total amount of $7.67 million. Mr. Foster increased his stake by 10.45% to 3,434,466 shares with this purchase.

According to the filing Mr. Foster gifted 325,000 shares to a "non-profit educational organization" and then purchased 325,000 shares on the open market. Based on his history of donating to Baylor University, it is possible that this $7.67 gift was also made to Baylor University.

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

P/E: 8.56Forward P/E: 14.35Industry P/E: 13.6
P/S: 0.31Price/Book: 1.52EV/EBITDA: 5.53
Market Cap: $2.61BAvg. Daily Volume: 3,462,75052 Week Range: $18.14 - $49.95

3. Penske Automotive Group, Inc. (PAG): $41.28

Chairman & CEO Roger S. Penske acquired 151,412 shares of this auto dealer, paying $39.85 per share for a total amount of $6.03 million. These shares were purchased indirectly by Penske Automotive Holdings Corp.

We also reported on a $36.44 million purchase by Mr. Penske last week and a reader left a comment on that article wondering if it was possible for a single individual to purchase $36.44 million worth of stock. Considering the holding company that acquired this stock already had 30.63 million shares prior to that large purchase and Mr. Penske's net worth was reported to be close to $2 billion last year, it is indeed very much possible.

The bigger question is whether Mr. Penske would be buying if we were indeed at "peak auto" as Ford (F) appeared to indicate in its last earnings call and that the CEO of Macy's (M) was hoping for when he made his "it's my turn, it's our turn" comment on Nightly Business Report this week.

You can view the list of recent insider transactions for Penske Automotive Group, Inc. here.

P/E: 11.03Forward P/E: 9.74Industry P/E: 12.8
P/S: 0.18Price/Book: 2.07EV/EBITDA: 12.18
Market Cap: $3.52BAvg. Daily Volume: 772,57252 Week Range: $29.29 - $54.1

4. SteadyMed Ltd. (STDY): $3.25

Shares of this specialty pharmaceutical company were acquired by 2 insiders:

  • Director Brian Jay Stark acquired 1,310,803 shares, paying $3.13 per share for a total amount of $4.1 million. Mr. Stark increased his stake by 108.53% to 2,518,633 shares with this purchase. 371,375 of these shares were purchased indirectly by Brown Bear Holdings LP and Stark Raving Mad LLC.

  • Director Keith Bank acquired 266,257 shares, paying $3.13 per share for a total amount of $833,384. These shares were purchased indirectly by SteadyMed Investors III LLC.

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

P/E: N/AForward P/E: N/AIndustry P/E: N/A
P/S: 35.6Price/Book: 1.97EV/EBITDA: -0.77
Market Cap: $44.15MAvg. Daily Volume: 12,31352 Week Range: $2 - $5.21

5. Gogo Inc. (GOGO): $11.18

Shares of this provider of WiFi services to airlines were acquired by 3 insiders:

  • Director Charles C. Townsend acquired 200,000 shares, paying $10.73 per share for a total amount of $2.15 million. These shares were purchased indirectly through a trust.

  • President and CEO Michael Small acquired 50,000 shares, paying $10.37 per share for a total amount of $518,635. Mr. Small increased his stake by 25.66% to 244,832 shares with this purchase.

  • EVP and CCO Ash A. Eldifrawi acquired 50,000 shares, paying $10.56 per share for a total amount of $528,020. Mr. Eldifrawi increased his stake by 178.02% to 78,087 shares with this purchase.

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

P/E: N/AForward P/E: N/AIndustry P/E: 23.73
P/S: 1.77Price/Book: 98.02EV/EBITDA: 22.89
Market Cap: $963.46MAvg. Daily Volume: 1,673,04052 Week Range: $7.8 - $19.61

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

Notable Insider Sales:

1. Facebook, Inc. (FB): $124.88

Director Jan Koum sold 566,668 shares of Facebook for $125.46, generating $71.09 million from the sale. These shares were sold indirectly through a trust.

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

P/E: 59.69Forward P/E: 24.83Industry P/E: 27.67
P/S: 16.19Price/Book: 7.09EV/EBITDA: 30.28
Market Cap: $358.61BAvg. Daily Volume: 21,048,70052 Week Range: $72 - $128.33

2. O'Reilly Automotive Inc. (ORLY): $286.73

Shares of this auto parts retailer were sold by 3 insiders:

  • Chairman of the Board David E. O'Reilly sold 140,000 shares for $290.27, generating $40.64 million from the sale. 35,000 of these shares were sold as a result of exercising options immediately prior to the sale.

  • Director Rosalie O'Reilly Wooten sold 10,000 shares for $290.20, generating $2.9 million from the sale.

  • Director Lawrence P. O'Reilly sold 6,000 shares for $290.34, generating $1.74 million from the sale.

You can view the list of recent insider transactions for O'Reilly Automotive Inc. here.

P/E: 28.5Forward P/E: 23.29Industry P/E: 25.82
P/S: 3.29Price/Book: 16.17EV/EBITDA: 15.57
Market Cap: $27.22BAvg. Daily Volume: 700,76452 Week Range: $225.12 - $292.84

3. Parsley Energy, Inc. (PE): $33.85

Shares of this independent oil and natural gas company were sold by 5 insiders:

  • Director, President and Chief Executive Officer Bryan Sheffield sold 1,100,000 shares for $32.15, generating $35.37 million from the sale.

  • Vice President-Chief Operating Officer Matthew Gallagher sold 45,000 shares for $32.64, generating $1.47 million from the sale.

  • Vice President Corporate Development Mike Hinson sold 25,000 shares for $32.87, generating $821,750 from the sale.

  • Vice President-General Counsel Colin Roberts sold 25,000 shares for $32.77, generating $819,250 from the sale.

  • Director David Henry Smith sold 6,250 shares for $32.99, generating $206,188 from the sale.

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

P/E: N/AForward P/E: 78.72Industry P/E: N/A
P/S: 18.95Price/Book: 3.06EV/EBITDA: 31.11
Market Cap: $5.80BAvg. Daily Volume: 2,888,91052 Week Range: $13.29 - $34.08

4. Antero Resources Corporation (AR): $27.42

Shares of this independent oil and natural gas company were sold by 2 insiders:

  • See Remarks Glen C. Warren Jr. sold 1,000,000 shares for $27.38, generating $27.38 million from the sale.

  • See Remarks Ward D. McNeilly sold 28,037 shares for $27.35, generating $766,893 from the sale.

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

P/E: 84.63Forward P/E: 94.55Industry P/E: 8.36
P/S: 5.17Price/Book: 1.31EV/EBITDA: 9.52
Market Cap: $8.42BAvg. Daily Volume: 3,722,88052 Week Range: $18.5 - $30.66

5. First Solar, Inc. (FSLR): $38.79

Shares of this solar energy provider were sold by 8 insiders:

  • Director James Alton Hughes sold 180,448 shares for $44.43, generating $8.02 million from the sale.

  • Chief Commercial Officer Georges Antoun sold 133,761 shares for $44.54, generating $5.96 million from the sale.

  • Chief Executive Officer Mark R. Widmar sold 90,289 shares for $44.53, generating $4.02 million from the sale.

  • Chief Technology Officer Raffi Garabedian sold 90,000 shares for $44.22, generating $3.98 million from the sale.

  • Chief Operating Officer Philip Dejong sold 67,251 shares for $44.28, generating $2.98 million from the sale.

  • EVP, Human Resources Christopher Bueter sold 29,384 shares for $44.23, generating $1.29 million from the sale.

  • EVP, General Counsel Paul J. Kaleta sold 20,343 shares for $44.53, generating $905,874 from the sale.

  • Chief Financial Officer Alexander R. Bradley sold 566 shares for $43.77, generating $24,774 from the sale.

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

P/E: 5.71Forward P/E: 14.98Industry P/E: 24.37
P/S: 1Price/Book: 0.69EV/EBITDA: 2.52
Market Cap: $3.97BAvg. Daily Volume: 2,646,62052 Week Range: $36.83 - $74.29

You can view the full list of sales from this Insider Sales page.

Disclaimer: I do not have any positions in any of the stocks mentioned in this article. 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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