Insider Weekends – COO of Walgreens Makes a Large Purchase

Welcome to edition 347 of Insider Weekends. Insider buying increased last week with insiders buying $24.08 million of stock compared to $22.23 million in the week prior. Selling on the other hand declined with insiders selling $1.53 billion of stock last week compared to $2.68 billion in the week prior. Even as we approach the end of earnings season, insider buying continues to remain anemic and is a tiny fraction of what we saw in the first two weeks of last February. Despite the small number of transactions, there were some interesting purchases including some that did not make the top 5 list 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 63.73. In other words, insiders sold almost 64 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 120.44.

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. Walgreens Boots Alliance, Inc. (WBA): $83.31

Co-Chief Operating Officer Ornella Barra acquired 124,000 shares of this pharmacy-led health and wellbeing company, paying $80.93 per share for a total amount of $10.04 million. Mr. Barra increased his stake by 7.88% to 1,697,438 shares with this purchase.

This purchase follows a large $162.82 million purchase by the CEO in November 2016 and we wrote the following in our November update,

“This was not an open market purchase, but the stake was acquired from Kohlberg Kravis Roberts & Co. L.P. (KKR). The affiliates of KKR are also selling 20.46 million shares in a secondary offering. Fortune magazine had a very interesting profile on Mr. Pessina titled The Billionaire Behind Walgreens’ Quest for Global Dominance that is well worth a read.

We normally do not feature purchases as a result of private transactions but decided to make an exception in this case.”

As discussed in our Merger Arbitrage Mondays series of posts, Walgreens is in the process of acquiring Rite Aid (RAD) and recently reduced its offer price to $7/share. The reduction in price was driven by the need to divest more stores than originally planned to get FTC approval for the deal.

You can view the list of recent insider transactions for Walgreens Boots Alliance, Inc. here.

2. Murphy USA Inc. (MUSA): $66.13

Shares of this gas stations operator were acquired by 2 insiders:

• Director Claiborne P. Deming acquired 15,000 shares, paying $65.39 per share for a total amount of $980,920. Mr. Deming increased his stake by 6.85% to 233,989 shares with this purchase.
• SVP John P. Corrigan acquired 1,000 shares, paying $66.05 per share for a total amount of $66,045.

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

3. QUALCOMM Incorporated (QCOM): $54

EVP and President, QCT Cristiano R. Amon acquired 18,815 shares of this wireless equipment manufacturer, paying $53.13 per share for a total amount of $999,596. Mr. Amon increased his stake by 583.59% to 22,039 shares with this purchase.

You can view the list of recent insider transactions for QUALCOMM Incorporated here.

4. Enterprise Products Partners L.P. (EPD): $28.69

Director James T. Hackett acquired 33,000 shares of this midstream energy services provider, paying $28.65 per share for a total amount of $945,450. These shares were purchased indirectly by Hackett 2010 Investment, LP.

You can view the list of recent insider transactions for Enterprise Products Partners L.P. here.

5. Dominion Resources, Inc. (D): $73.37

Shares of this electric utility and natural gas company were acquired by 2 insiders:

• Director Michael E. Szymanczyk acquired 10,000 shares, paying $71.69 per share for a total amount of $716,940. These shares were purchased indirectly through a trust.
• Director Susan N. Story acquired 1,000 shares, paying $71.90 per share for a total amount of $71,900. Ms. Story increased her stake by 177.94% to 1,562 shares with this purchase.

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

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

Notable Insider Sales:

1. Evercore Partners Inc. (EVR): $78.55

Shares of this investment banking and asset management company were sold by 5 insiders:

• President and CEO Ralph Schlosstein sold 312,196 shares for $79.01, generating $24.67 million from the sale. 28,628 of these shares were sold as a result of exercising options immediately prior to the sale.
• CEO EVR Partners International Andrew Sibbald sold 39,479 shares for $78.29, generating $3.09 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Principal Financial Officer Robert B. Walsh sold 15,000 shares for $79.12, generating $1.19 million from the sale. 7,808 of these shares were sold as a result of exercising options immediately prior to the sale.
• General Counsel Adam B. Frankel sold 2,000 shares for $79.40, generating $158,805 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• Controller, Principal Accounting Officer Paul Pensa sold 1,406 shares for $79.18, generating $111,330 from the sale.

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

2. The Blackstone Group L.P. (BX): $30.35

Director Bennett J. Goodman sold 635,075 shares of this asset management company for $30.26, generating $19.22 million from the sale. 158,769 of these shares were purchased indirectly by a limited liability company.

You can view the list of recent insider transactions for The Blackstone Group L.P. here.

3. American Financial Group, Inc. (AFG): $91.55

Co-CEO & Co-President Carl H. Lindner II sold 200,000 shares of this insurance company for $90.91, generating $18.18 million from the sale. These shares were sold indirectly through a trust.

You can view the list of recent insider transactions for American Financial Group, Inc. here.

4. Penumbra, Inc. (PEN): $72

Shares of this medical devices company were sold by 6 insiders:

• Chairman, CEO and President Adam Elsesser sold 39,400 shares for $70.25, generating $2.77 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• President, International James Robert Pray sold 32,700 shares for $70.58, generating $2.31 million from the sale.
• CFO and Head of Strategy Sridhar Kosaraju sold 15,600 shares for $71.48, generating $1.11 million from the sale. These shares were sold indirectly through a trust.
• President, North America Daniel Donen Davis sold 13,532 shares for $70.16, generating $949,436 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• EVP and Chief Business Officer Lynn Rothman sold 5,586 shares for $70.31, generating $392,758 from the sale.
• EVP, Gen. Counsel & Secretary Robert D. Evans sold 5,000 shares for $71.01, generating $355,047 from the sale. These shares were sold indirectly through a trust.

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

5. The Goldman Sachs Group, Inc. (GS): $242.72

Shares of Goldman Sachs were sold by 5 insiders:

• Vice Chairman Pablo J. Salame sold 16,185 shares for $240.19, generating $3.89 million from the sale.
• Principal Accounting Officer Sarah G. Smith sold 10,691 shares for $234.89, generating $2.51 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• EVP-Chief of Staff & Secretary John F.W. Rogers sold 8,338 shares for $240.15, generating $2 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• President and Co-COO David M. Solomon sold 6,250 shares for $240.08, generating $1.5 million from the sale. 2,085 of these shares were sold indirectly through a trust.
• EVP, Global Head of Compliance Alan M. Cohen sold 2,384 shares for $239.84, generating $571,767 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 The Goldman Sachs Group, Inc. here.

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

Disclaimer: I hold a position in Rite Aid (RAD). 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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