Insider Weekends – Leucadia Starts a Position in Fiesta Restaurant

Welcome to edition 350 of Insider Weekends. Insider buying decreased significantly with insiders buying $57.94 million of stock compared to $156.38 million in the week prior. We saw a larger group of insiders buying last week even though the total for the week was lower than the week prior, which was dominated by a single large purchase by Carl Icahn. Selling also declined with insiders selling $2.1 billion of stock last week compared to $2.45 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 went up to 36.19. In other words, insiders sold more than 36 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 15.65.

Insider Sell Buy Ratio March 3, 2017

Insider Sell Buy Ratio March 3, 2017

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. Fiesta Restaurant Group, Inc. (FRGI): $19.8

Director Brian P. Friedman acquired 660,000 shares of this restaurant chain, paying $20.33 per share for a total amount of $13.42 million. These shares were purchased indirectly by Leucadia National Corporation.

Mr. Friedman was the Chair of the Execute Committee at Jefferies before its acquisition by Leucadia in March 2013 and became the President of Leucadia following the acquisition. Mr. Friedman also served as President of Jefferies Capital Partners, a private equity fund management company controlled by Mr. Friedman in which Jefferies has an ownership interest.

In mid-2013, Mr. Friedman sold over $33 million of Fiesta Restaurant Group stock indirectly through Jefferies Capital Partners at an average price of $35.34. It is interesting to see Mr. Friedman purchase shares of Fiesta at much lower prices during this downturn in the fast casual dining industry.

You can view the list of recent insider transactions for Fiesta Restaurant Group, Inc. here.

P/E: 31.94 Forward P/E: 15.47 Industry P/E: 26.24
P/S: 0.77 Price/Book: 2.07 EV/EBITDA: 9.58
Market Cap: $529.43M Avg. Daily Volume: 351,441 52 Week Range: $19.4 – $38.54

2. American Homes 4 Rent (AMH): $23.44

Director Wayne B. Hughes acquired 485,232 shares of this real estate investment trust, paying $23.39 per share for a total amount of $11.35 million. These shares were purchased indirectly through a trust.

Various insiders of American Homes 4 Rent have been purchasing shares since 2013 and we have reported on several purchases by Mr. Hughes in the past. We wrote the following after his purchase in mid-2015 at much lower prices,

This is the third purchase (of) a million shares by Mr. Hughes we have reported on over the last six months. Following his purchase in December we mentioned,

“Mr. Hughes is the billionaire founder of Public Storage (PSA) and retired as the CEO of PSA in 2012. He founded the former manager of American Homes 4 Rent in 2011.”

For a REIT, the company has an unusually low yield of just 1.2%, when compared to the average yield of 3.27% of all residential equity REITs (PDF). The value most likely lies in the single family homes that company holds on its balance sheet as their timing in buying single family homes after the great recession was impeccable. The company trades at 1.05 times tangible book value.

You can view the list of recent insider transactions for American Homes 4 Rent here.

P/E: N/A Forward P/E: 156.27 Industry P/E: N/A
P/S: 6.51 Price/Book: 1.36 EV/EBITDA: 19.96
Market Cap: $6.99B Avg. Daily Volume: 2,158,250 52 Week Range: $15.07 – $23.98

3. Asta Funding, Inc. (ASFI): $8.95

Senior Vice President Ricky Stern acquired 471,086 shares of this consumer receivable business, paying $10.35 per share for a total amount of $4.88 million. These shares were purchased indirectly through a trust.

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

P/E: 20.86 Forward P/E: N/A Industry P/E: 25.83
P/S: 1.86 Price/Book: 0.59 EV/EBITDA: 9.28
Market Cap: $106.29M Avg. Daily Volume: 20,254 52 Week Range: $7.55 – $11.97

4. Landauer, Inc. (LDR): $53.6

Director Jeffrey A. Strong acquired 43,946 shares of this radiation measurement and medical physics services provider, paying $51.62 per share for a total amount of $2.27 million. These shares were purchased indirectly by Gilead Capital LP.

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

P/E: 27.79 Forward P/E: 27.49 Industry P/E: 32.81
P/S: 3.49 Price/Book: 27.82 EV/EBITDA: 15.75
Market Cap: $515.75M Avg. Daily Volume: 38,093 52 Week Range: $29.21 – $55.8

5. Plains GP Holdings, L.P. (PAGP): $33.11

Chairman of the Board & CEO Greg L. Armstrong acquired 50,000 shares of this energy pipeline, storage and transportation company, paying $31.00 per share for a total amount of $1.55 million. Mr. Armstrong increased his stake by 11.10% to 500,625 shares with this purchase.

You can view the list of recent insider transactions for Plains GP Holdings, L.P. here.

P/E: 34.89 Forward P/E: 11.7 Industry P/E: 24.25
P/S: 0.16 Price/Book: 1.91 EV/EBITDA: 9.22
Market Cap: $16.63B Avg. Daily Volume: 1,312,120 52 Week Range: $9.6 – $36.09

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

Notable Insider Sales:

1. Wal-Mart Stores, Inc. (WMT): $70.03

Director Robson S. Walton sold 8,209,704 shares of Wal-Mart for $71.19, generating $584.43 million from the sale. These shares were sold indirectly from the Walton Family Holdings Trust.

You can view the list of recent insider transactions for Wal-Mart Stores, Inc. here.

P/E: 15.99 Forward P/E: 15.43 Industry P/E: 29.81
P/S: 0.45 Price/Book: 2.79 EV/EBITDA: 7.72
Market Cap: $215.22B Avg. Daily Volume: 9,352,640 52 Week Range: $62.72 – $75.19

2. Facebook, Inc. (FB): $137.17

Shares of Facebook were sold by 4 insiders:

  • COB and CEO Mark Zuckerberg sold 386,116 shares for $135.97, generating $52.49 million from the sale.
  • Chief Operating Officer Sheryl Sandberg sold 327,000 shares for $135.88, generating $44.43 million from the sale. These shares were sold indirectly through a trust.
  • Chief Financial Officer David M. Wehner sold 2,015 shares for $136.66, generating $275,370 from the sale.
  • VP and General Counsel Colin Stretch sold 750 shares for $136.78, generating $102,582 from the sale.

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

P/E: 39.27 Forward P/E: 20.53 Industry P/E: 35.42
P/S: 14.3 Price/Book: 6.67 EV/EBITDA: 24.74
Market Cap: $396.42B Avg. Daily Volume: 18,749,200 52 Week Range: $104.4 – $137.82

3. GMS Inc. (GMS): $32.54

Shares of this interior construction products company were sold by 2 insiders:

  • Chairman of the Board Richard K. Mueller sold 1,000,000 shares for $27.93, generating $27.93 million from the sale. These shares were sold indirectly by Second Bite Investments, LLC.
  • Director John J. Gavin sold 7,500 shares for $27.93, generating $209,503 from the sale.

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

P/E: 36.12 Forward P/E: 16.11 Industry P/E: N/A
P/S: 0.63 Price/Book: 2.7 EV/EBITDA: 12.99
Market Cap: $1.33B Avg. Daily Volume: 286,556 52 Week Range: $19.28 – $33.52

4. Stanley Black & Decker, Inc. (SWK): $128.04

Shares of this machine tools & accessories company were sold by 7 insiders:

  • President, CEO James M. Loree sold 60,300 shares for $127.14, generating $7.67 million from the sale. 50,000 of these shares were sold as a result of exercising options immediately prior to the sale.
  • V.P. Corporate Tax Michael A. Bartone sold 13,768 shares for $79.92, generating $1.1 million from the sale.
  • SVP & Group Executive-GTS Jeffrey D. Ansell sold 12,254 shares for $86.05, generating $1.05 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
  • CFO,GT&S and Pres.,Ind Vert Lee B. McChesney sold 5,628 shares for $129.90, generating $731,077 from the sale. 3,750 of these shares were sold as a result of exercising options immediately prior to the sale.
  • Sr. VP, General Counsel & Secretary Bruce H. Beatt sold 4,404 shares for $127.17, generating $560,043 from the sale.
  • VP Ops, GTS & GEM (incl DTV) Steven J. Stafstrom sold 3,343 shares for $90.61, generating $302,923 from the sale.
  • V.P. and Treasurer Craig A. Douglas sold 2,371 shares for $129.94, generating $308,087 from the sale.

You can view the list of recent insider transactions for Stanley Black & Decker, Inc. here.

P/E: 19.67 Forward P/E: 16.89 Industry P/E: 25.03
P/S: 1.71 Price/Book: 3.07 EV/EBITDA: 11.88
Market Cap: $19.54B Avg. Daily Volume: 901,290 52 Week Range: $95.57 – $130.47

5. Nielsen Holdings plc (NLSN): $44.77

Director David L. Calhoun sold 230,000 shares of this information and measurement company for $44.93, generating $10.33 million from the sale.

You can view the list of recent insider transactions for Nielsen Holdings plc here.

P/E: 32.21 Forward P/E: 15.18 Industry P/E: 28.51
P/S: 2.56 Price/Book: 3.93 EV/EBITDA: 14.32
Market Cap: $16.01B Avg. Daily Volume: 2,936,050 52 Week Range: $40.28 – $55.94

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

Disclaimer: 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

Leave A Comment

You must be logged in to post a comment.