Insider Weekends – Bruce Berkowitz adds to his Seritage Stake

Welcome to edition 346 of Insider Weekends. Insider buying declined last week with insiders buying $22.23 million of stock compared to $33.94 million in the week prior. Selling increased more than fourfold with insiders selling $2.68 billion of stock last week compared to $614.39 million 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 went up to 120.44. In other words, insiders sold more than 120 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 18.1.

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. Seritage Growth Properties (SRG): $43.51

10% owner Bruce R. Berkowitz purchased 75,200 shares of this retail REIT, paying $40.63 per share for a total amount of $3.06 million. These shares were acquired in accounts managed indirectly by Mr. Berkowitz.

We wrote the following about Seritage three weeks ago following a $5.61 million purchase by Mr. Berkowitz,

“We normally exclude purchases by 10% owners but decided to once again make an exception for this purchase by Bruce Berkowitz on behalf of The Fairholme Fund. Seritage was spun out of Sears (SHLD) in mid-2015 and made headlines a few months later when Warren Buffett disclosed an 8% stake in the company. Mr. Berkowitz has consistently purchased shares of Seritage every few months since it went public.”

In his 2016 annual letter to Fairholme Fund shareholders Mr. Berkowitz writes,

“Fortune Magazine notes that “there is still a lot of life in that American mainstay, the suburban mall,” but the tenant mix is shifting to accommodate new consumer preferences. Indeed, growing demand for “very un-mall-like grocery stores, spin-class fitness shops, and entertainment centers” presents attractive opportunities for landlords such as Seritage, who can convert existing retail square footage to “non-retail spaces that people want.”

In 18 months, Seritage has re-leased 2.2 million square feet and commenced or completed 48 wholly owned redevelopment projects. Sears now represents 65% of signed lease revenue; down from 90%. Headlines overlook this renter diversification and ignore Seritage’s acceleration with large mixed-use redevelopments in Santa Monica (California), Aventura (Florida), Hicksville (New York), and Redmond (Washington).

You can view the list of recent insider transactions for Seritage Growth Properties here.

2. Macquarie Infrastructure Corporation (MIC): $77.99

Shares of this infrastructure investment company were acquired by 5 insiders:

• Chief Executive Officer James Hooke acquired 15,000 shares, paying $74.15 per share for a total amount of $1.11 million. Mr. Hooke increased his stake by 26.51% to 71,576 shares with this purchase.
• Director Martin Stanley acquired 4,000 shares, paying $74.15 per share for a total amount of $296,600. Mr. Stanley increased his stake by 100.00% to 8,000 shares with this purchase.
• Chief Financial Officer Liam Stewart acquired 2,500 shares, paying $74.15 per share for a total amount of $185,375. These shares were purchased indirectly by Jayandell Holdings 1, LLLP.
• General Counsel and Secretary Michael Kernan acquired 1,000 shares, paying $74.15 per share for a total amount of $74,150.
• Vice President Jay Davis acquired 1,000 shares, paying $74.15 per share for a total amount of $74,150. Mr. Davis increased his stake by 13.64% to 8,331 shares with this purchase.

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

3. Live Oak Bancshares, Inc. (LOB): $20.65

Vice Chairman & EVP William L. Williams III acquired 50,000 shares of this bank holding company , paying $20.34 per share for a total amount of $1.02 million. These shares were purchased indirectly by 2015 GRAT.

You can view the list of recent insider transactions for Live Oak Bancshares, Inc. here.

4. Abbott Laboratories (ABT): $42.78

Executive Vice President Stephen R. Fussell acquired 12,200 shares of this health care company, paying $40.77 per share for a total amount of $497,394. Mr. Fussell increased his stake by 7.87% to 167,167 shares with this purchase.

You can view the list of recent insider transactions for Abbott Laboratories here.

5. Opko Health, Inc. (OPK): $8.61

CEO & Chairman Phillip Frost M.D. acquired 49,000 shares of this devices and drug development company, paying $8.58 per share for a total amount of $420,520. These shares were purchased indirectly by Frost Gamma Investments Trust.

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

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

Notable Insider Sales:

1. Microsoft Corporation (MSFT): $63.68

Shares of Microsoft were sold by 10 insiders:

• Director Mason G. Morfit sold 11,000,000 shares for $63.32, generating $696.54 million from the sale. These shares were sold indirectly through funds.
• Founder Bill Gates sold 8,000,000 shares for $64.16, generating $513.25 million from the sale.
• Chief Accounting Officer Frank H. Brod sold 7,500 shares for $65.35, generating $490,125 from the sale.

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

2. Apple Inc. (AAPL): $129.08

Shares of Apple were sold by 6 insiders:

• Director Andrea Jung sold 100,000 shares for $128.05, generating $12.81 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• SVP, General Counsel, Secretary Bruce D. Sewell sold 75,000 shares for $128.43, generating $9.63 million from the sale.
• Director Albert Gore Jr. sold 70,000 shares for $128.35, generating $8.98 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Chief Executive Officer Timothy D. Cook sold 48,571 shares for $125.04, generating $6.07 million from the sale.
• Principal Accounting Officer Chris Kondo sold 2,649 shares for $128.05, generating $339,204 from the sale.
• Director Arthur D. Levinson sold 2,580 shares for $127.99, generating $330,214 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 Apple Inc. here.

3. Chemical Financial Corporation (CHFC): $49.53

Shares of this regional bank were sold by 5 insiders:

• Director David T. Provost sold 175,000 shares for $48.25, generating $8.44 million from the sale.
• Director Gary Torgow sold 125,000 shares for $48.25, generating $6.03 million from the sale.
• Director Arthur A. Weiss sold 27,500 shares for $48.25, generating $1.33 million from the sale.
• Director Richard M. Lievense sold 8,151 shares for $48.77, generating $397,557 from the sale.
• Director Ronald A. Klein sold 5,000 shares for $48.88, generating $244,400 from the sale. These shares were sold indirectly through a trust.

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

4. BlackRock, Inc. (BLK): $378

Shares of this asset management company were sold by 6 insiders:

• Chief Operating Officer Robert L. Goldstein sold 10,374 shares for $377.31, generating $3.91 million from the sale.
• Senior Managing Director Jeff A. Smith sold 5,250 shares for $377.00, generating $1.98 million from the sale.
• Senior Managing Director Robert W. Fairbairn sold 4,975 shares for $373.08, generating $1.86 million from the sale.
• Senior Managing Director Mark McCombe sold 4,680 shares for $375.00, generating $1.76 million from the sale.
• CFO & Senior Managing Director Gary Shedlin sold 2,417 shares for $375.00, generating $906,375 from the sale.
• Principal Accounting Officer Marc D. Comerchero sold 600 shares for $374.64, generating $224,785 from the sale.

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

5. The Priceline Group Inc. (PCLN): $1583.38

Shares of this online travel company were sold by 2 insiders:

• Exec Chairman of the Board Jeffery H. Boyd sold 3,000 shares for $1570.51, generating $4.71 million from the sale.
• CEO and President Glenn D. Fogel sold 1,000 shares for $1570.70, generating $1.57 million from the sale.

You can view the list of recent insider transactions for The Priceline Group Inc. here.

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

Disclaimer: I hold a long position in Sears Holdings (SHLD). 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.

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